Hammes Partners has closed its inaugural healthcare real estate private equity fund, hitting a hard cap of $430 million, the firm said on Friday.
This is the first private equity fund from Hammes Partners, an affiliate of Milwaukee-based Hammes Company, a healthcare consulting and real estate development firm founded in the early 1990s.
“We have an affiliate that has been a healthcare consultant for over 20 years and will serve as a huge resource for our private equity fund,” Patrick Hammes, principal at Hammes Partners told PERE's sister publication Private Healthcare Investor. “We’ll be able to leverage the capabilities and relationships to source, underwrite and manage the deals that we close on the fund.”
The fund, Hammes Partners II, is dedicated to outpatient facilities, including medical office buildings and ambulatory care centers. It will be invested in facilities across the US.
The firm has already drawn down capital from the vehicle, said Hammes, and has made several investments in both acquisitions and new developments.
The fund’s limited partners are made up of endowments, foundations, pension funds, insurance companies, funds of funds and family offices.
Known investors in the fund include the New Jersey Division of Investment, which committed $100 million; the Employees Retirement System of Texas, which committed $50 million; the Ohio Bureau of Workers’ Compensation, which committed $50 million; and the New Mexico Educational Retirement Board, which committed $25 million.
Hammes said that during the fundraising process, some investors were wary of committing to such a niche fund, but that overall the firm found significant interest in its sector focus.
“There are certainly investors in the market that have chosen a blinded approach when it comes to niche strategies, but there was a lot of appetite for a focused strategy and in particular a strategy we’ve been employing for a long time,” he said.
The firm has several future deals in the pipeline, according to Hammes.
“As the healthcare industry looks for ways to provide more affordable care, we think it will continue to be done in an outpatient setting, so we think the outpatient real estate market is going to be very attractive and will continue to draw a lot of interest.”