The State Of Texas Real Estate Fund has seen its fundraising target increased to $500 million, more than three times the original target when it was launched in January.
JP Realty Partners and KGW Real Estate, which jointly sponsor the fund, initially had set a fundraising target of $150 million. However, after receiving several large investor commitments, the Dallas-based joint venture decided to increase its target.
“We have several very interested institutional investors that love our average IRR of 54 percent and our 2.25x cash multiple over the past five years,” said Kevin White, chief executive of KGW and co-managing director of the fund. “However, most of these institutional investors have a minimum investment size of $50 million to $100 million and cannot be more than 20 percent of any fund. We solved that problem immediately by increasing to $500 million.” White declined to disclose how much the fund has raised so far.
The fund is looking to raise capital from institutional and high-net-worth investors for high-quality distressed office, industrial and raw land primarily in Austin, the Dallas/Fort Worth area and Houston. According to the fund's website, it expects to utilize 50 percent to 70 percent leverage and to invest $10 million to $12 million per transaction. The fund is targeting a net IRR of 20 percent to 22 percent.
Mark Jordan, owner of JP Realty Partners, also serves as co-managing director for the fund. Both Jordan and White individually have managed funds in the past, but this joint venture represents their first fund totally focused on Texas real estate. Jordan has completed more than $700 million in real estate transactions during his 20-plus years of experience, while White has managed more than $300 million in international client investments over his 14 years of experience.