Origin holds first close for Fund III

The Chicago-based firm is trying to raise a value-add fund that is more than double the size of its predecessor vehicle.

Origin Investments has held a $55.5 million first close for its latest value-add vehicle Origin Capital Fund III, the firm said Thursday.

The Chicago-based private equity real estate firm launched the fund in December with a $150 million target. The firm, formerly known as Origin Capital Partners, plans to invest in eight US markets with growing populations and job numbers, including Austin, Atlanta and Denver. Origin will deploy $10 million to $30 million per transaction, according to the Thursday statement.

“This strategy, which historically has delivered tremendous results for the firm and our investors, helps to limit competition from larger institutional players and allows us to demonstrate our ability to substantially enhance the value of assets we acquire,” co-founder Michael Episcope said in a statement.

For its third fund, Origin has a gross internal rate of return (IRR) target of 17 percent to 19 percent with a 2x gross multiple, according to the firm. Fund II, which launched in 2013 and closed in May 2014 at $64.7 million, is expected to produce a 28 percent IRR and a 2.3x gross multiple, according to the firm.

Origin’s investor base includes high-net-worth individuals, family offices, institutional investors, and the firm crowd sources some of its investments through a proprietary online platform. About 73 percent of the investors from the second fund returned to invest in the latest vehicle, according to a spokesman. Co-founders Episcope and David Scherer also committed $10 million to the third vehicle, according to the statement.

“Having skin in the game is not some toss-away phrase here,” Scherer said. “We invest right alongside our investors in significant sums.”

Origin, founded in 2007, has about $500 million in assets under management, according to the firm’s statement.