Hungerford Properties, a Vancouver-based real estate investment firm, has held a first close on its debut opportunistic real estate fund. The Hungerford Properties Western Canada (HPWC) Opportunities Fund has raised C$60 million (€45.8 million; $60.9 million) in equity commitments from investors, which include family offices in the Americas, Europe and Asia as well as a European fund of funds manager.
To reach its target of C$150 million, Hungerford has extended the fundraising period for the vehicle by three months to March 31. In addition to the C$60 million the firm has raised so far, Hungerford already has soft-circled an additional C$50 million from investors on behalf of the fund. Allegro Securities is acting as the fund’s advisor and placement agent.
Hungerford is seeking minimum commitments of C$1 million from global institutional investors, as well as family offices and high-net-worth investors. Although the firm has had extensive experience investing on behalf of high-net-worth individuals, this is Hungerford’s first institutional fundraising. Through the HPWC Opportunities Fund, the firm is targeting a gross internal rate of return of approximately 20 percent.
Andrew Hungerford, partner at Hungerford Properties, told PERE that the HPWC Opportunities Fund targets Class B buildings in Western Canadian cities such as Vancouver, Edmonton and Calgary. “These cities have good fundamentals,” he said. “They are seeing strong GDP growth, population growth and job growth. Western Canada's deep wealth of a variety of natural resources has helped it outperform during the global recession.
Hungerford already has made two investments on behalf of the HPWC Opportunities Fund. The first is two adjacent sites near the Vancouver airport. On the 8.5-acre site is a 200,000-square-foot light industrial building that Hungerford renovated. On the adjacent 3-acre site is a warehouse office occupied by North American foodservice distributor Gordon Food Service. This investment has a projected gross IRR of 30 percent.
The second investment, near the Calgary airport, is a 7.4-acre site on which Hungerford plans to build two buildings comprising 120,000-square-foot commercial condos. That investment is projected to provide a gross IRR of 39 percent.