Real estate developer-cum-investor Billy Procida is launching a localised fund to focus on bridge loans, mezzanine debt and equity investments in the New York and New Jersey metropolitan area. Procida is able to launch the fund now that a non-compete agreement from the sale of his former company, Palisades Financial, has expired.
The fund, known as The 100 Mile Fund, is looking to raise $50 million in equity and is expected to launch on or around July 10. The value-added vehicle got its name because its goal is to seek out retail, multifamily, condo, office and hotel properties within a 100-mile radius of Procida's home office in Englewood Cliffs, New Jersey. According to Procida, this will enable him to personally oversee each property the fund invests in.
“I'm the best at what I do within 100 miles of my office,” Procida said. “Personal knowledge of the people in the market and the ability to get there without a plane are critical. I go to every site and every borrower; I'm about as hands-on as you can get.”
Procida continued: “I wouldn't trust anyone in New York to invest in Chicago with my money. The problem with the industry today is that too many firms rely too heavily on third parties. This whole industry should get out of the office and go to the construction sites.”
Indeed, Procida himself is not only serving as principal fund manager but also is the fund’s first investor, having invested $5 million of his own money into the vehicle, which is seeking minimum commitments of $250,000 from individual and institutional investors. Although he expects fundraising will take about 18 months from launch to final close, he noted that it could take as much as two years. Procida is not using a placement agent.
The fund is projecting IRRs of 13 percent but hoping for the high teens, not unlike the returns made with Procida's prior two funds, Palisades Regional Investment Funds 1 and 2. These funds completed more than $1 billion in combined investments with average returns in excess of 18 percent over six years. Those funds were invested when Procida was founding chief executive of Palisades Financial.
Procida, through his firm Procida Funding & Advisors, plans to roll out Funds II, III and IV in the next few years, each targeting $50 million. However, according to Procida, time is not yet a factor. “I'm in no rush,” he said. “The goal is to make good returns for my investors.”
Prior to the current venture, Procida was principal of Procida Construction and founder of Procida Development. In 1995, he sold his interest in both companies and formed Palisades Financial. He sold his interest in Palisades in 2007 to form Procida Funding & Advisors, signing a three-year non-compete clause that recently expired.