IMRF-backed Brasa ups institutional support with Fund II

Brasa Capital Management, a Los Angeles-based emerging manager, has closed its second non-core real estate fund with $450 million in capital commitments.

Brasa Real Estate Fund II represents a significant step up from its predecessor fund, which raised $120 million in 2019. The earlier vehicle was launched in 2018 shortly after the firm was founded by former AEW executive Eric Samek. Samek spent more than 10 years at the Boston-based firm, most recently overseeing the Western US region for AEW’s Opportunity Fund.

The firm’s second fund attracted capital from 15 institutional investors, including public and private pensions, insurance companies and foundations. In an exclusive interview with PERE, Samek said more than 90 percent of Fund II’s capital came from institutions. In contrast, Brasa raised half the capital for Fund I from high-net-worth investors and family offices. That vehicle had only two institutional investors, both of which recommitted to Fund II.

The firm has received backing from the Illinois Municipal Retirement Fund through Artemis Real Estate Partners’ minority real estate manager of managers program, according to the pension plan’s website. Additionally, Brasa is part of GCM Grosvenor’s emerging manager program.

Because “a lot of LPs can’t or won’t invest in first time funds,” Fund I acted as a proof-of-concept, Samek said. Advisers – who include Jeff Furber, chief executive of AEW; and Robert Rosen, former CEO of Ares Management, according to public documents – told Samek that Brasa would have the opportunity to “right-size” its second fund if the firm could prove it had the right processes and staff in place.

From seven investments in the firm’s first fund, Brasa has produced a 68 percent gross IRR and 2.3x gross equity multiple, according to documents presented to the Employees’ Retirement Fund of the City of Dallas in May. Samek said the second fund is targeting between 13 percent and 15 percent net IRRs.

Similarly to Fund I, Brasa will target middle-market deals across the capital stack with its latest fund. Deal sizes range from $5 million to $35 million in value-add and opportunistic investments that can include equity, debt origination and the purchase of non-performing loans. Opportunities in the latter have become more prevalent in the last few weeks, Samek said.

With Fund II, Brasa will primarily invest in office, residential and industrial, although the firm can also pursue build-to-rent single-family rentals, retail and hospitality, according to the DERF presentation. Distress entering the market is likely to create opportunities in office, retail and hospitality that the firm will look to take advantage of, Samek said.