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EXCLUSIVE: Rockpoint to capture $1.4 billion for Fund V

The Boston-based private equity real estate firm is expected to hold its largest and fastest first close with its latest opportunity fund. 

Rockpoint Group is poised to reach a first close of its latest opportunistic property fund, Rockpoint Real Estate Fund V, in just three months, PERE has learned. According to multiple sources, the Boston-based private equity real estate firm has raised approximately $1.4 billion of its $2.5 billion equity target, with a closing due imminently. It is also said to have soft-circled a total of more than $2 billion in commitments for the fund. Rockpoint declined to comment.

The initial close for Fund V, which was officially launched in September, marks the largest and fastest such close for Rockpoint. Limited partners include the Pennsylvania State Employees’ Retirement System (PennSERS), which committed up to $50 million in October, and the New Mexico Educational Retirement Board (ERB), which pledged $35 million in November.

Fund V will pursue a similar strategy to that of Fund IV, focusing on value creation opportunities and resolving complex situations through the acquisition of primarily office, hotel and multifamily properties in the largest US coastal markets, according to the minutes from New Mexico ERB’s investment committee meeting last month. The minutes also revealed that a first close for the fund was slated for this month and that approximately $2.4 billion of the total capital raised is expected to come from existing investors, which include both PennSERS and New Mexico ERB.

Rockpoint, which was founded by Bill Walton and Keith Gelb in 2003, has been marketing back-to-back funds as of late. The firm kicked off fundraising for Fund V just as it was wrapping up its first core-plus real estate fund, Rockpoint Core Plus Real Estate Fund (CPF), which closed on a total of $950 million in September. The launch of CPF, meanwhile, came less than a year after the final close of Fund IV, which gathered $1.95 billion in commitments and $380 million in co-investment capital in March 2013.

As of October 20, Fund IV was 80 percent committed and had invested more than $1.27 billion of capital in 27 deals with an estimated gross internal rate of return of 27 percent, according to the New Mexico ERB minutes. The pension plan’s real assets team has forecasted that Fund IV will generate a net IRR of 18 percent by the end of its life.