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GreenOak brings capital total to $1.2bn

The private equity real estate firm founded three years ago by ex-Morgan Stanley Real Estate Investing heads Sonny Kalsi, John Carrafiell and Fred Schmidt has held a first closing for its second US fund and a final closing for its first Japan fund.

GreenOak Real Estate has brought the amount of capital it has raised to date to $1.2 billion following a first closing of its second US focused fund and a final closing of its first Japan focused fund.

According to a note to investors obtained by PERE, GreenOak, which was founded in 2010 by ex-Morgan Stanley Real Estate Investing heads Sonny Kalsi, John Carrafiell and Fred Schmidt, held a first closing of $250 million for its GreenOak Real Estate US Fund II fund. The vehicle is intended to facilitate investments in office, residential and retail properties in major US cities that require capital restructuring or physical repositioning.

Following a capital raising extension, partly due to the Tohoku earthquake in 2011, GreenOak has also held a final closing for its first Japanese fund, GreenOak Real Estate Japan Fund I, on $260 million. While that raising was approximately half its original $500 million target, it did meet an adjusted hard cap that was requested by investors in return for granting the extension. PERE understands that a late flurry of investor appetite for the vehicle saw it actually oversubscribed by as much as $200 million and, as such, a sequel fund for opportunistic investments in Japan is already in the works.

The capital raisings follow GreenOak’s haul of $260 million for US Fund I, for which another $90 million was raised in co-investment capital, and a further $300 million for investments in Europe on a case-by-case basis, bringing the total amount raised by the firm since its inception to $1.16 billion.

GreenOak declined to comment when approached about its fundraising activities. However, US Fund II is understood to have attracted capital commitments from three large repeat investors alongside some other smaller commitments. Among its largest backers from US Fund I was the pension fund of Detroit-based multinational corporation General Motors, although it is unclear at this stage whether it has backed the firm again in US Fund II. 

In its note to investors, GreenOak said it was hoping to raise $500 million in total for the vehicle although it is understood a hard cap for the fund has been set at $600 million. Placement agents RiverBridge Capital Partners and Park Madison Partners are advising GreenOak on the raising.

US Fund I is 90 percent invested at this point with 14 investments made, predominantly in New York, but also in Los Angeles, Boston and San Francisco. US Fund II is expected to follow a similar geographic strategy, but will have permission to deploy between 10 percent and 20 percent of its capital in special situations outside of these markets.

Meanwhile, GreenOak is thought to be paving the way for a sequel Japan offering following the strong demand it received towards the end of its capital raising for Japan Fund I, a vehicle that includes New York State Common Retirement Fund among its investors. According to its note, the firm has invested and committed $100 million of the capital raised in 10 office investments and one CMBS loan position secured by an office building. All these investments occurred in Tokyo and the city is likely to be the focus of a repeat fund. GreenOak is understood to be in the early stage of its planning for the next fund although it is expected to once again target $500 million and hit the market in the first half of next year.