Rockpoint closes its largest opportunity fund on $3.8bn – Exclusive

Rockpoint Group has closed its sixth and largest opportunistic real estate fund to date on $3.8 billion, surpassing its initial target of $3 billion as well as its $3.5 billion hard-cap.

The Boston-based manager closed more than $1 billion for Rockpoint Fund VI this calendar year alone, including $500 million from new investors all finalized during the covid-19 pandemic, PERE understands. Two of those first-time investors committed capital without being able to meet with Rockpoint in person due to travel restrictions.

Rockpoint’s flagship fund series traditionally targets office, multifamily and hotel assets in US gateway markets, but its strategy permits the firm to pursue any undervalued real estate asset, including industrial properties and non-performing loans. The firm is targeting net returns between 13 and 15 percent as well as a multiple between 1.6x and 1.8x, according to a meeting document from the Connecticut Retirement Plans and Trust Funds, which committed $150 million in April.

The anticipated average equity check for the fund is $60 million with an average transaction price of $200 million. As of April, the fund had acquired four assets, which collectively account for about $500 million of equity.

Fund VI also represents the firm’s most geographically diverse investor base to date. The pool of roughly 50 institutions consists of public and corporate pension funds, sovereign wealth funds, endowments, foundations from the US, Canada, Europe, Asia and the Middle East. The series also attracted its first capital commitment from Latin America.

Prominent US investors include the Teachers’ Retirement System of the State of Illinois, which committed $200 million, and the Minnesota State Board of Investment and the South Dakota Investment Council, which each contributed $100 million.

The firm’s previous opportunity fund, Rockpoint Fund V, closed on $3.28 billion in 2016. Thus far it has achieved a net internal rate of return of 12.3 percent and a 1.5x net multiple.

While raising Fund VI, Rockpoint also raised its third core-plus vehicle, Growth and Income Fund III, which closed on $2 billion last month. This was the first time the manager raised capital for both series simultaneously.

In a joint statement, Rockpoint co-founders Bill Walton and Keith Gelb said the $5.8 billion raised for the two vehicles speaks to their track record over 25 years as well as the confidence felt by their investors: “In the wake of the challenges our economy has faced in recent months, we believe there will be significant opportunities across both Fund VI and RGI III, and we are excited to pursue what we expect will be attractive real estate investments in our target US markets.”