EXCLUSIVE: Beacon closes fund at $1.38bn

The Boston-based private equity real estate firm was marketing the vehicle for more than two years.

Beacon Capital Partners has wrapped up fundraising for its seventh fund, Beacon Capital Strategic Partners VII (BCSP VII). The Boston-based real estate investment firm informed its investors yesterday that it had gathered a total of $1.38 billion for the fund, including $300 million of co-investment capital. BCSP VII had an original target of $1.25 billion.

Beacon held a first close in July 2014 and had raised a total of $635.45 million as of this past July, according to filings with the US Securities and Exchange Commission (SEC).

Media reports show that the firm had been marketing the fund since at least October 2013.

Similar to other funds in the Beacon Capital Strategic Partners series, BCSP VII will be focused on value-add US office investments and is approximately one-third invested in seven transactions. The fund’s investments to date have included the acquisitions of 85 Broad Street and 575 Fifth Avenue in New York; 515 North State Street in Chicago; 160 Federal Street in Boston; the Maritime Building in Seattle; and 400-450 North Brand Boulevard in Glendale, California. Two of the deals provided co-investment opportunities to the fund’s new and repeat investors.

BSCP VII is smaller in size than Beacon’s prior three investment vehicles. The firm previously raised $2.54 billion for BSCP VI in 2008, $4.04 billion for BSCP V in 2007 and $2.03 billion for BSCP IV in 2005, according PERE Research & Analytics. In 2012, the Montana Board of Investments placed BSCP V on its troubled investments list. “While the manager has done a good job of trying to preserve value, suffering from the impact the recession has had on office properties, the fund is not expected to recover our cost,” the pension system noted in board meeting documents at the time.

Monument Group, Morgan Stanley and Barclays Capital acted as placement agents for the fund, according to the SEC filings. Monument solicited commitments from US and non-US investors, Morgan Stanley marketed to only non-US investors and Barclays solicited from its clients and select institutional investors, the filings said.

With additional reporting by Arshiya Khullar