Like the Greek goddess of the hunt who shares its name, Artemis Real Estate Partners has demonstrated in its short history a prowess for hitting its targets – or in this case, exceeding them. Heading into its third year, the Chevy Chase, Maryland-based real estate manager has just closed on its first real estate fund and also has formed a separate account with one of the nation’s largest pension funds.
When the nascent manager launched its debut vehicle, Artemis Real Estate Partners Fund I, in February 2010, it aimed to raise $150 million for its first close and a total fund size of $350 million. Artemis, which did not use a placement agent, went on to hold a first close on $223 million in January 2011 and amassed a total of $436 million by its final close last month.
In October, Artemis also formed a $300 million separate account with the New York State Common Retirement Fund to launch the pension plan’s new real estate emerging manager programme. The separate account will make enhanced core investments through joint ventures with eight to 10 emerging managers, which must have less than $1 billion in equity capital under management, be raising its first or second fund and be in business for 12 years or less.
Artemis Fund I, which hopes to deliver a 16 percent return, will focus on investments in office, retail, industrial, multifamily and senior housing properties, initially targeting distressed situations and nonperforming loans in the $10 million to $40 million range. To date, the firm has made five investments, including acquisitions of a retail asset, two multifamily properties, an assisted-living facility and a discounted B note backed by an office building.
Artemis is led by industry veterans Penny Pritzker and Deborah Harmon, who together kicked in $50 million toward the fund’s first close. Pritzker, the firm’s chairman, also is chairman and chief executive officer of the Chicago-based Pritzker Realty Group, which oversees the non-hotel real estate investments owned by the Pritzker family. Harmon, Artemis’ chief executive, previously was president and chief investment officer of JER Partners, where she oversaw the investment of more than $4.5 billion in equity on behalf of eight private equity funds.
It’s also no coincidence that about one-third of Artemis’ 18-person staff is made up of former JER employees, including president Alex Gilbert, who headed JER’s US fund business, and chief financial officer Brad Berkley. “It’s important when you’re starting up a business that you can assemble a team of people that have worked together before and with whom you have significant investment and operations experience,” Harmon said.
Harmon said she has yet to see growing investor interest in emerging managers translate into actual commitments. The 28 LPs in Artemis Fund I included public and private pension funds such as the New York State Teachers’ Retirement System, foundations, family offices and high-net-worth individuals. Of those, only one had an emerging manager programme for real estate and its allocation represented just 3 percent of the total capital raised by the fund.
Not only are investors with emerging real estate manager mandates currently few in number – Harmon estimated there are only about 10 – but they also are in the early stages of allocating capital. She is hopeful that, if the current crop of mandates deliver strong performance, “there will be more emerging manager programmes” for real estate.
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: 
