Rockpoint Group is off to a strong fundraising start for its latest lower-risk real estate fund, which had a first closing on more than $1 billion last week, PERE understands.
Launched in spring 2018, the Boston-based firm’s Growth and Income Fund III is on track to meet its $2 billion target, which would make it the biggest since the series began in 2014. Rockpoint took RGI III to market just six months after closing its predecessor, RGI II, on $1.7 billion.
Rockpoint declined to comment for this report.
Like previous funds in this series, RGI III will focus primarily on office and multifamily assets in US coastal gateway cities with stronger cashflows and fewer capital demands than properties targeted by Rockpoint’s opportunistic vehicles. The fund series has a 50 percent leverage cap.
Since its inception, Rockpoint’s Growth and Income fund series has raised roughly $3.5 billion.
The private equity real estate manager has seen strong support for RGI III from previous investors, PERE understands, including the Public Employees Retirement Association of New Mexico, which has committed $65 million to the fund, according to a spokesman. The New York State Teachers’ Retirement System has likewise contributed $50 million – the same amount it invested in RGI II.
PERA reported a net liquidation internal rate of return of 25.5 percent and a 1.18x investment multiple on RGI II, to which it committed $75 million, according to its most recent performance disclosure for the period ending September 30. Meanwhile, the Indiana Public Retirement System, which committed $50 million to the previous RGI fund, projects a net 8.94 percent IRR on RGI II and a realization multiple of 1.06x, according to its Q3 2018 performance report. Rockpoint is targeting 9-10 percent net IRR and a multiple of 1.8-1.9x on RGI II.
NYSTRS declined to share its performance data, citing a non-disclosure agreement with Rockpoint.
INPRS, which has not committed to RGI III, also invested $50 million in Rockpoint’s fifth opportunistic vehicle, Real Estate Fund V, which had delivered a net IRR of 9.54 percent and a multiple of 1.12x as of fall 2018. Real Estate V closed on $3.3 billion in spring 2016, surpassing its $2.5 billion target.
Rockpoint is understood to be marketing its sixth opportunistic real estate fund, which is expected to reach its first close later this year.