Equus Capital Partners, formerly BPG Properties, has held a final close on its latest value-added vehicle, BPG Investment Partnership IX. The fund, which had an original target of $250 million, exceeded that goal by 24 percent with a final total of $310 million in equity commitments.
The Philadelphia-based fund manager held its first close on Fund IX in September 2011 on $105 million. The fund held an interim close in October 2012, updating its total amount raised to $135 million. Joe Nahas, senior vice president of institutional marketing and investor relations at Equus, told PERE that the fund was designed with the intent to hold multiple closes in order to allow prospective investors to see the progress of the fund’s performance.
“When we launched, the market was still recovering and some LPs were somewhat reluctant to make commitments,” said Nahas. “Because we had a series of closes, we started investing in assets very early on and were able to exhibit our performance, which allowed LPs to see that we were executing per our plan.”
Fund IX brought in investors such as pension plans, endowments, foundations, Taft-Hartley plans and high-net-worth individuals. Most recently, the Montana Board of Investments made a $30 million commitment to the fund in November. Other investors include the Pennsylvania State Employees Retirement System, the West Virginia Investment Management Board and the Danvers Retirement Board of Danvers, Massachusetts.
Fund IX, which has deployed $83 million of its capital thus far, will invest in value-added office, multifamily, industrial and retail properties located in major metropolitan centers throughout the US. The fund plans to leverage its investments by 60 percent to 65 percent and is targeting a net internal rate of return in the low to mid-teens. Equus plans to continue making investments for Fund IX throughout 2014 and into 2015, Nahas noted, estimating that the fund will have a portfolio of 30 to 40 properties at the end of its investment period.
Currently, Fund IX’s nine-property portfolio includes multifamily, office, lab and industrial properties located in the East, Midwest and Southwest regions. Its latest investment was the acquisition of Meridian Corporate Plaza, a three-building office park located in Carmel, Indiana, for $42 million.