Dune two-thirds of way towards latest fund target

The private equity real estate firm founded by Dan Neidich has raised $793.9m for its second vehicle, Dune Real Estate Fund II. The vehicle is targeting $1.25bn.

Dune Real Estate Partners has raised almost $800 million for its second property fund, according to regulatory filings.

The New York-based firm led by Dan Neidich has raised $793.9 million in commitments for Dune Real Estate Fund (DREF) II, which is targeting a final close of $1.25 billion, filings to the US Securities and Exchange Commission show.

According to fund documents on the Illinois State Universities Retirement System website, DREF II is targeting distressed commercial and residential real estate, over-leveraged sellers as well as non-performing loans and debt. The fund aims to achieve IRRs of 18 percent net of fees, with management fees of 1.5 percent a year.

DREF II is expected to focus on the US and Western Europe across all property sectors. It follows on from Dune’s first property fund, DREF I, which closed in 2006 on $727 million. DREF I, according to SURS, had net IRRs of 4.5 percent with a 1.1x multiple as of the end of 2007, with projected gross IRRs of between 18 percent and 22 percent. The fund is fully invested.

In December last year, SURS investment committee approved a $40 million commitment to DREP II.

Dune Real Estate was formed in 2004 by Neidich, along with Chip Seelig and Steven Mnuchin. The firm is the real estate arm of Dune Capital Management. Neidich previously founded Goldman Sachs’ Whitehall Street Real Estate Funds in 1991, raising more than $12 billion for the bank.