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Davis closes Fund III on $512m

The firm exceeded its target for the value-added vehicle, its largest fund yet.

The Davis Companies has closed its latest value-add fund on $512 million, PERE has learned.

The firm declined to comment, but the Boston-based investment firm wrapped up fundraising at the end of the year for Davis Investment Ventures Fund III, its largest fund to date, according to sources with knowledge of the vehicle. Davis launched the fund in the summer of 2015 with a $500 million target and held a first close in November 2015 on $260 million, PERE previously reported.

Through the fund series, the real estate development firm invests in debt and equity positions in all property types across the US, with a particular focus on the Boston to Washington, DC corridor in the north-east. Davis seeks returns in the mid-teens for Fund III.

Its investor base comprises foundations, endowments, public and corporate pension plans, high-net-worth individuals and family offices. Greenhill & Company acted as the placement agent for the fund.

Davis closed the predecessor vehicle in November 2012 at $414 million after about a year of fundraising, PERE previously reported. The firm declined to provide performance data on their funds.

The firm’s most recent publicly available transaction was the October purchase of an industrial property in Stamford, Connecticut, according to data provider Real Capital Analytics. Davis bought 300 Stillwater Avenue, a 150,000-square-foot property, for $20 million in a joint venture with Highland Development Ventures, a White Plains, New York-based developer, on behalf of Fund III. The duo plans to convert the site into a self-storage facility, an investment strategy Davis began employing with its second fund, PERE understands.

The firm, led by Jonathan Davis, was founded in 1976. After the global financial crisis, Davis formed its first fund to attract capital from high-net-worth individuals and family offices. Davis Investment Ventures Fund I’s target was $200 million, and the firm raised $229.5 million for the vehicle, which closed in 2009, according to PERE data.

The firm currently manages about $2.7 billion in assets.