Related Companies has closed its second opportunistic fund, Related Real Estate Fund II, with commitments of over $1 billion, the firm announced Tuesday.
The New York-based private development firm set a formal $850 million target for the vehicle. Related plans to deploy capital from the fund in assets that need repositioning in US gateway cities and major urban centers including New York, Boston, Chicago, Los Angeles, Miami and San Francisco, according to a company statement.
Related launched the fund in the fall of 2014. Investors in the second opportunistic fund included the University of Michigan’s endowment, which allocated $35 million; Indiana Public Retirement System, which committed $50 million; and Texas County and District Retirement System, which allocated $40 million, according to PERE Research & Analytics.
Related also beat the target for its 2012 fund, raising $825 million to invest in the US against a $750 million equity goal. The firm has the same investment strategy for both funds, acquiring distressed debt linked with development, redevelopment and repositioning, and buying assets that need repositioning.
“In Fund 1 we identified a diverse set of opportunities that allowed us to reimagine, reposition and rehabilitate undervalued properties that now stand as some of the best core assets in their respective markets,” Justin Metz, Related’s managing principal, said in a statement. “We have already made several investments for the new vehicle as well.”
Related manages over $3 billion of external capital and has raised over $4 billion. It is currently developing the 28-acre Hudson Yards project on Manhattan’s Far West Side in partnership with Oxford Properties, the real estate arm of the Ontario Municipal Employees Retirement System.
Greenhill, based in New York, was the placement agent for both funds.