Rockpoint holds $800m first close for new fund – Exclusive

Rockpoint Group has held a first close for its second core-plus real estate fund, Rockpoint Growth and Income Fund II, PERE has learned. The Boston-based private equity real estate firm netted $800 million in the close, which occurred on Friday, from a mix of new and existing investors from the US, Canada and Asia.

Rockpoint launched the closed-ended vehicle in June 2015, with a target of $1.5 billion to $2 billion in total fund and sidecar commitments. About $1.25 billion to $1.5 billion of the equity goal is expected to be raised from the fund itself, according to sources familiar with the matter.

Similar to its opportunistic Rockpoint Real Estate Fund series, the firm invests primarily in the office and multifamily sectors in major US markets with its core-plus strategy. The Growth and Income Fund series, however, is focused on stabilized assets with strong existing cash flows and less capital-intensive business plans than Rockpoint’s opportunistic fund investments. The firm is said to target 11 percent to 12 percent gross returns, with a 50 percent leverage cap, for the fund. Rockpoint declined to comment.

PERE understands that Growth and Income Fund I currently is 90 percent committed. Recent investments on behalf of the fund include the acquisition of 99 Summer Street, a 240,000 square foot office and retail building in Boston last December; the purchase of 75-101 Federal Street, an 812,000-square-foot, two-building office complex in Boston for $326.5 million in July 2015; and the acquisition of The Wimbledon, a 223-unit apartment building in New York City for $218 million in January 2015.

Rockpoint launched its core-plus fund series in 2013, closing on a total of approximately $1 billion for Growth and Income Fund I a year later. The firm originally named the series Rockpoint Core-Plus Funds but subsequently renamed the vehicle to better reflect their focus on generating returns through active asset management as opposed to higher leverage. The focus on value creation also is understood to be one of the reasons that the fund is closed-ended as opposed to open-ended, the latter of which has been more typical of core-plus funds that have been launched in recent years by traditionally opportunistic firms such as The Blackstone Group.