Harbert Management has closed its latest US-focused real estate fund at approximately $100 million over its original target, representing the Birmingham, Alabama-based firm’s largest close for a real estate vehicle to date. Harbert United States Real Estate Fund V, which had a $300 million target, brought in equity commitments in excess of $400 million, surpassing the vehicle’s hard cap.
The capital raised came from approximately 25 commitments from of a mix of existing and new investors, according to Harbert managing director Travis Pritchett. Approximately $50 million in equity came from high-net-worth individuals, while Harbert employees and affiliates put in just over $25 million in capital, with the balance coming from a mix of endowments, foundations and pension plans from across the US and Europe.
Similar to its previous US-focused funds, Fund V is targeting a diversified portfolio of value-added assets in the office, multifamily, retail and industrial sectors. The vehicle will focus on such “job-creating” markets as Dallas, Houston, Austin, Atlanta, Orlando, Nashville, Charlotte and similar sized markets along the West Coast.
“We’re excited about what we’re seeing in terms of market opportunities,” Pritchett told PERE. “It’s always a challenging to invest, but it’s an exceedingly good time to be buying value-added real estate.”
Thus far, Harbert has deployed approximately $100 million across eight transactions on behalf of Fund V, creating a geographically diverse portfolio of multifamily and office assets. The investment team has a robust pipeline and will continue to focus on investments that exhibit strong cash returns and value appreciation potential.
Fund V held a first close in December 2012 on $46 million and a second close last December on $109 million, according to filings from the US Securities and Exchange Commission. At the time of its interim close, Harbert had soft-circled the remaining $300 million in capital for the fund, according to Pritchett.
“The US real estate market has become increasingly attractive to our investors, and we are delighted to see the fund close on such a strong note,” said Raymond Harbert, chairman and chief executive officer, in a press release. Globally, Harbert manages approximately $4 billion in assets, which includes $1.5 billion in committed equity across its US and European real estate funds.