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French expat firm halfway to $150m fund close – Exclusive

The Black Tulip Organization, a Miami-based firm run by and for French expatriates who want to invest in affordable housing, has collected about $75 million for its debut fund.

Global investors have typically sought out attractive Miami real estate for personal investments – luxury condominiums with beach views and the like. But one emerging firm is offering global investors, specifically the French and their expatriate countrymen, the ability to invest in affordable multifamily housing, a somewhat niche strategy for a niche investment base.

PERE has learned that the Black Tulip Organization, a Miami-based firm with an office in New York, is well on its way to raising its debut fund, launched in February 2014. The vehicle, Black Tulip Fund, has picked up about half the capital for its $150 million target, and the firm’s founder, Benoit P. Pous Bertran de Balanda – a French expatriate himself – said he expects to finish fundraising by the end of the year.

The core fund invests primarily in New York City and Miami multifamily properties, with some investments in storage and retail strategies. The firm, founded in 2011, is targeting a 12 percent net internal rate of return for the fund. Black Tulip’s investor base ranges from individuals, who invest between $50,000 and $200,000, to institutional and family offices, which have made commitments between $200,000 and $20 million. These investors hail from all corners of the globe, including institutional capital from France and Luxembourg, and individual French investors currently living in countries including Brazil, the US, Russia and French Polynesia.

“French investors are a little bit scared of the US real estate market because of prices and what happened in the booming years, and what happened in 2007,” Pous Bertran de Balanda told PERE. “We’re not exposed to the [real estate] bubble we have now in Miami.”

That protection from the overheated luxury housing market comes from the firm’s investments in a different segment of Miami real estate. Black Tulip has focused on Section 8 properties, multifamily buildings that house low and moderate-income households with government assistance. Pous Bertran de Balanda said 70 percent of these properties’ income comes from the government, giving the firm a source of stable revenue. He also said Black Tulip requires a 50 percent deposit for buyers, a hedge against the defaults that plagued Miami real estate in the global financial crisis.

To date, the firm has invested in 10 properties with capital from the fund, nine in Florida and the latest in Manhattan’s Financial District. Pous Bertran de Balanda was originally a real estate and securities lawyer in Europe who began investing in real estate in law school. He moved to the US in 2010 and became a licensed broker, originally selling New York real estate through a previous iteration of Black Tulip before launching a fund in 2014.