C-III Capital Partners has held an initial closing for its second real estate equity fund, C-III Recovery Fund II, raising a total of $369.86 million, according to a filing with the US Securities and Exchange Commission last week.
The new vehicle, which C-III began marketing actively this spring, already has exceeded the total equity haul for its predecessor fund, C-III Recovery Fund I, which held a final close on $310.1 million last year. The Irving, Texas-based firm declined to comment, but sources familiar with the matter said it is targeting $550 million in commitments for Recovery Fund II, which will pursue both real estate equity investments as well as debt purchases with the goal of ultimately owning the underlying asset. C-III is said to have made a co-investment of more than $10 million in the fund.
Earlier this year, C-III was reported to be marketing its second commercial real estate debt fund, C-III High Yield Real Estate Debt Fund II, for which it was seeking up to $250 million in commitments. However, PERE understands that as Recovery Fund II more quickly gained traction with investors, the firm decided to focus its fundraising and investment efforts on the equity fund. The real estate debt vehicle was to target purchases of commercial mortgage-backed securities and loans, as well as mortgage originations. In 2011, the firm reportedly raised about $66.6 million in capital for C-III High Yield Real Estate Debt Fund I.
C-III is an affiliate of Island Capital, a New York-based merchant banking firm, both of which are led by chief executive Andrew Farkas. In addition to loan originations and fund management, C-III also is actively involved in primary and special loan servicing through its subsidiary, C-III Asset Management.