Boston-based manager Long Wharf Capital has closed its sixth fund on more than $500 million, PERE has learned.
The US-focused diversified fund was launched in June 2018 with a target of $400 million. It orchestrated the fundraise internally, a source familiar with the fund told PERE, attracting commitments from a mix of both new returning investors. The Arkansas Teacher Retirement System committed $50 million to Long Wharf Real Estate Partners VI after investing in three of its predecessor vehicles. Long Wharf also secured commitments from the State University Retirement System of Illinois, the Chicago Teachers’ Pension Fund and Illinois Municipal Retirement Fund, among others.
Following recommendations from its own staff as well as its consultant, Aon Hewitt Investment Consulting, the ATRS board of trustees voted to invest in Long Wharf Real Estate Partners VI in December 2019, citing the firm’s performance track record.
Long Wharf’s previous five funds have averaged an 8.5 percent net internal rate of return, according to board meeting minutes. Real Estate Partners III delivered an IRR of 7.4 percent, per the document, while Long Wharf’s 2015-vintage fifth fund, which raised $437 million against a $400 million target, is projected to deliver a 13 percent IRR. Meanwhile, Real Estate Partners VI is targeting a net IRR between 12 and 15 percent.
Long Wharf will target all property types and regions in the US with its latest fund, with equity check sizes ranging from $10 million to $30 million, PERE understands.
In a fundraising environment increasingly dominated by large, diversified mega-funds and niche sharpshooters, Long Wharf is a rare breed of broad-based mid-market managers. As of end 2019, 22 funds raised by mid-market managers had raised $1 billion or more, according to PERE data. The average closing among this cohort was $747 million, up more than $200 million from the year prior.
Originally part of the Boston-based bank Fidelity Investments, Long Wharf spun out in 2011 and launched its first independent fund, Real Estate Partners IV, in 2012. The firm has closed on approximately $75 million of assets across all its vehicles to date.
Long Wharf declined to comment for the article.