Rockpoint Group is raising its second core-plus real estate fund, Rockpoint Core-Plus Fund (CPF) II, according to two people familiar with the new vehicle. The firm launched the fund about a month ago, less than a year after holding a final close on its predecessor last September. A first closing is expected in the fall, one person said.
With its second core-plus fund, Rockpoint is seeking to potentially double the equity haul of its debut offering in the strategy. CPF I, which was launched in October 2013, had a target of $1 billion and was structured more like a club vehicle, ultimately raising $950 million from five to six limited partners, including North Carolina Retirement System, Oregon Public Employees’ Retirement System and New York State Teachers’ Retirement System. CPF II, by comparison, will target $1.5 billion to $2 billion in commitments from a larger pool of investors.
As with the opportunistic Rockpoint Real Estate Fund series, the firm pursues transactions primarily in the office and multifamily sectors in major US markets with its core-plus strategy. The CPF series, however, is focused on stabilized assets with strong existing cash flows and less capital-intensive business plans than Rockpoint’s opportunistic fund investments. Similar to CPF I, which is now said to be about 75 percent invested, the firm will target 11 to 12 percent gross returns, with a 50 percent leverage cap, for its new offering.
Rockpoint is one of a handful of private equity real estate firms that historically have pursued opportunistic strategies but more recently have expanded into the core-plus space, where assets generally have strong existing cash flows and less capital-intensive business plans than opportunistic investments. The Blackstone Group launched its core-plus fund, Blackstone Property Partners, and its overall core-plus business, in January 2014, and had attracted more than $5 billion of capital for the vehicle as of April. Angelo Gordon also has raised core-plus funds, while The Carlyle Group also is exploring investments in the strategy.
Meanwhile, Rockpoint, which was founded in 2003 by former Westbrook Real Estate Partners executives Bill Walton and Keith Gelb, also is in the market with its latest opportunistic fund, Rockpoint Real Estate Fund V, for which it is seeking up to $2.5 billion in equity. PERE understands that the firm launched Fund V last September and has raised $2 billion to date.