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Mercer debut fund committed at £225m target – exclusive

UTIMCO was the cornerstone investor in Mercer Real Estate Partners debut fund, but PERE understands there is now a mix of established US and European investors committed to the fund.

London-based real estate investment manager, Mercer Real Estate Partners, recently held a close at £200 million (€264 million; $287 million) on its debut closed-end commingled fund, known as Fund II.  Mercer is believed to have its £225 million target fully committed and retains a relatively small allocation to its hard cap that is expected to be filled by Q2 2016.

The firm, established in 2010 by Brandon Hollihan and Michael Kovacs, who previously worked at New York-based real estate investment manager Westbrook Partners, began by working on a deal-by-deal basis with investors in 2010. It invested its first discretionary separate account fund in 2012 and held an £85 million first close on Fund II back in May.

US investor, The University of Texas Investment Management Company (UTIMCO), was the cornerstone investor in Mercer's fund, but PERE understands there is now a mix of established US and European investors committed to the fund.

Fund II is focused on small to mid-sized transactions, typically in the £10 million to £30 million range. The firm targets value-add opportunities within the office, residential and retail sectors but also is able able to make investments in the industrial and hospitality sectors in the UK as well.

Mercer Real Estate is believed to have sold its separate account assets and is focusing on a low levered strategy for Fund II with a considerable amount of the fund's capital deployed to date. Recent deals from Fund II include the acquisition of an eight-story office building in Manchester city center from The Duchy of Lancaster (a private portfolio of properties and land owned by the Queen, as Duke of Lancaster) and the purchase of a 68,000 square-foot London office property Harbour Island in Canary Wharf from a key institutional investor.

Mercer is believed to be represented by Atlantic Pacific Capital for its Fund II raise.

Mercer and Atlantic Pacific declined to comment.