Davis holds first close for $500m fund

The firm garnered about $260 million in commitments for the value-added fund.

The Davis Companies has held an initial close on its third fund, raising about $260 million on its way to a $500 million target.

The Boston-based investment firm held the first close in the last month for Davis Investment Ventures Fund III, its largest fund to date. The firm seeks returns in the mid-teens for the value-added vehicle through acquiring US properties across asset classes. Greenhill & Company is the placement agent.

Davis closed its last fund in November 2012 at $414 million after about a year of fundraising. Through the commingled vehicle, 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 Northeast. In addition, through its capacity as an operator, Davis also makes direct investments in distressed assets through the funds, and stabilizes the properties through its operating platform.

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. The first fund’s target was $200 million, and the firm raised $229.5 million for the opportunistic vehicle that closed in 2009, according to PERE Research & Analytics.

The firm declined to comment.