Encore Capital targets $150m co-investment fund

The Dallas-based real estate investor has hired Realty Capital Partners CEO Donna Arp to help develop the firm’s institutional relationships as it raises Encore Opportunity Fund II.

Encore Capital has hired Realty Capital Partners chief executive officer Donna Arp to help the firm raise $150 million for its second vehicle.

The Dallas-based investor raised $150 million in equity commitments for its first fund, a family and friends vehicle that closed in June, and is hoping to secure $150 million, and possibly up to $250 million, for Encore Opportunity Fund II.

Arp will help spearhead the fundraise with managing director Larry Jones, after being brought on develop the firm’s high net worth and institutional relationships. Arp was previously chief executive and president of Colleyville, Texas-based RCP, and closed on $250 million of capital which was invested in a series of joint ventures, including with Encore.

Speaking to PERE, Encore chief executive Patrick Barber said the firm was looking to invest in the US hospitality, retail and multifamily sectors, including some condo deals.

Founded in 1999, Enterprise originally focused on the hospitality and retail sectors surrounding the US interstate 10, which runs coast-to-coast along the southern part of the US, including near the Gulf of Mexico, accumulating up to $1.2 billion of assets by 2007.

After three hurricanes in six weeks, the firm relocated its headoffice from Gulfport, Mississippi to Dallas. IN 2007, the firm also sold all but two of its hotels and all of its retail operations, including a portfolio of 29 hotels to Goldman Sachs’ Whitehall Street funds and the asset management arm, the Archon Group.

“Week after week we are seeing the bid-ask spread narrow and get closer together as sellers become more realistic,” Barber said, adding: “There is a lot of product out there and we’re preparing for a lot of opportunities.”

Encore will also target loan portfolios from the banking regulator Federal Deposit Insurance Corporation (FDIC). Encore II is expected to close by the end of the year.