After leaving his position as managing director and head of research and investment strategy at New York-based investment firm Clarion Partners in April, David Lynn is launching a new fund on behalf of his firm, PERE has learned.
Lynn Capital Management is about to raise capital for a global multi-asset strategy fund. The commingled vehicle, the LCM Total Return Fund, will target residential and commercial mortgage-backed securities, public REITs and real estate securities, real estate funds, preferred equity, debt, master limited partnerships and international bonds. Currently, the firm is not looking to make direct real estate investments on behalf of the fund.
“People want hard, tangible assets. It’s all about current income, current income, current income,” Lynn told PERE. “The assets in the LCM Total Return Fund will fit that bill nicely.”
Lynn Capital will be seeking institutional investors and high-net-worth individuals, both domestic and global, to commit to the fund. The fund currently has $2 million of seed capital, which the firm has provided as a co-investment. Since the vehicle is targeting all liquid positions, there’s no cap to the fund. However, Lynn said that he plans to stop fundraising by the end of 2013.
Once the fund receives capital, it will be able to deploy the capital immediately. Approximately 20 percent of the fund is expected to be invested into other funds, while 80 percent is expected to go into direct investments. The fund will target both US and international assets.
The strategy is value-investing with an emphasis on high and durable income. The investment horizon is five to 10 years. “I’m a long-term investor,” Lynn added.
Although Lynn officially formed Lynn Capital Management roughly two years ago, the LCM Total Return Fund will be the firm’s first commingled vehicle. The firm has offices in New York and San Francisco.
In addition to raising capital, Lynn currently is writing a new book about the wealth management space. Due to come out in the fall of 2013, the working title is Real Estate for the Wealth Advisor (though Lynn added: “We may come up with something snazzier in the meantime.”) The book is intended to help educate wealth advisors and investors with experience investing in fixed-income and equities the value, methods and risks of investing in real estate.
“People need to invest in more alternative assets,” Lynn said. “Real estate is less volatile and better performing than fixed income.” The book also will include chapters from leading real estate strategists and asset managers.
Lynn was with Clarion for five years, having joined in 2007 when the firm was part of ING Real Estate Investment Management. As head of research and investment strategy, he defined the firm’s portfolio investment strategy and played a role in its product development initiatives, ranging from new opportunistic funds to new markets and business strategies. He also was a member of Clarion’s investment and operating committees.
Prior to joining Clarion, Lynn was managing director, global chief strategist and economist at AIG Global Real Estate, the real estate investment management division of American International Group.
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