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Equus closes tenth fund on $361m

The Philadelphia-based firm is already preparing for the launch of its eleventh vehicle.

Equus Capital Partners has closed its tenth value-added fund on $361 million, the firm said last week.

The Philadelphia-based private equity real estate firm launched Equus Investment Partnership X in the first quarter of 2015 with a $300 million target and a $400 million hard-cap, chief executive Daniel DiLella told PERE. The firm closed the predecessor vehicle in January 2014 on $310 million, after having launched it in 2011 with a $250 million target, PERE previously reported.

Equus has already deployed about half of its tenth fund’s capital and plans to launch its eleventh fund in the spring. DiLella said this was the “best timing for [the] organization in terms of resource allocation,” expecting that the current fund’s capital will be 75 percent committed by that time. The firm has targeted a net internal rate of return in the low to mid-teens for the fund series.

Fund X’s investor base comprises public and corporate pension plans, high net worth individuals and Taft-Hartley plans. San Joaquin County Employees’ Retirement Association (SJCERA) earmarked $25 million and Montana Board of Investments invested $20 million for the tenth fund, according to PERE data. About 55 percent of Fund X’s limited partners were existing investors and 45 percent were new LPs, DiLella said. The fund has generated a 21 percent net return on realized funds, according to September 2015 meeting materials from SJCERA, the most recent publicly available performance data.

To date, the firm has made 11 investments across the US on behalf of the fund, focusing on office, multifamily and lab/research and development properties, according to Wednesday’s announcement. Equus targets investing one-third of its funds’ capital in office; one-third in multifamily; and one-third in other property types, including industrial and retail real estate, DiLella said. The firm is currently considering acquiring office properties in Alpharetta, Georgia, an Atlanta suburb.

“We continue to find assets that need fundamental change, whether it’s physical or financial restructuring,” he said. “We move in and out of various geographic locations, looking for dislocations in the market.”

The firm, which manages about $4 billion in assets, does not use a placement agent, DiLella said.