The private equity real estate firm led by former Morgan Stanley Real Estate Investing (MSREI) triumvirate Sonny Kalsi, John Carrafiell and Fred Schmidt, has raised more than $700 million for its second US-focused opportunity fund, PERE has learned.
In an overwhelming show of endorsement from the firm’s investors, GreenOak has raised more than 40 percent more equity for the seven-year vehicle than it originally had targeted when it commenced fundraising last year. Helping GreenOak raise the capital was Park Madison Partners in the US and Anthony Biddulph’s CAPRA Global Partners in Europe. The raising is expected to be finalized in a final closing of the fund next month.
The capital haul for GreenOak US Fund II means the firm has now collected more than $2 billion for funds, side cars and accounts since Kalsi, Carrafiell and Schmidt launched GreenOak in the wake of their respective departures from MSREI after the global financial crisis.
After a tentative start in which both GreenOak’s first US- and Japan-focused funds raised little more than half their original $500 million targets – partly because of generally poor fundraising conditions, their association with Morgan Stanley’s troubled, pre-crisis opportunity funds and the Tohuku earthquake in 2011 – the performances of these debut funds are understood to have encouraged investors to back the firm to a greater extent this time around.
Accordingly, the second US fund’s strategy is in keeping with that of Fund I, which saw GreenOak deploy capital into gateway cities, particular into New York where its US office is based. That fund is targeting IRRs of between 15 percent and 18 percent and but is understood to be greatly exceeding that range. Similarly, Fund II is believed to have the same target.
GreenOak also is understood to be on target to achieve a similar level of performance for its Japan fund, which was closed last year and is now completely deployed. A second vehicle is poised to be launched, either next month or in October, for which GreenOak plans to corral another $500 million from investors. However, in a difference to the firm’s US effort, for this second fund GreenOak is expected to expand its investment activities to include some investments in other Asian gateway cities, possibly including Seoul. For that fund, Hodes Weill & Associates has been appointed as placement agent.
GreenOak declined to comment.