Rockwood closes Fund X at hard-cap – Exclusive

The value-added fund is about 30% committed, with capital deployed in nine investments.

Rockwood Capital has closed its latest value-added fund on $1.1 billion, PERE has learned.

The New York-based firm launched Rockwood Capital Real Estate Partners Fund X in January 2015 and held a first close in July 2015, according to a filing with the US Securities and Exchange Commission.

A spokeswoman for Rockwood declined to comment, but PERE understands that the firm set an $800 million target for Fund X with a $1.1 billion hard-cap.

Rockwood is targeting a 12 to 14 percent net internal rate of return, PERE previously reported. In the fund series, the company focuses on assets with the potential for income growth through repositioning, releasing, rehabilitation or development.

“We will continue to employ a measured investment pace, applying discipline and patience to identify and take advantage of opportunities that are consistent with our investment strategy,” Tyson Skillings, Fund X’s portfolio manager, said in a statement. “We will focus on speed-to-income, or how quickly value creation can be executed and a durable income stream put in place.”

The fund’s investor base comprises public and private pension funds, foundations, endowments, insurance companies, funds of funds, family offices and high net worth individuals, and over 60 percent of the latest fund’s investors have invested in previous vehicles. Investors include the Minnesota State Board of Investment, which earmarked $100 million, and Kentucky Teachers’ Retirement System and New Mexico Public Employees Retirement Association (PERA), which each invested $60 million, according to PERE data.

New York-based Park Madison Partners was the fund’s North America placement agent and London-based Threadmark Partners was the placement agent for Europe.

“We are proud to have achieved such a positive fundraising outcome with Rockwood and Fund X,” said Nancy Lashine, managing partner and founder of Park Madison. “In addition to reaching the fund’s hard-cap, we were able to further diversify Rockwood’s investor base with high quality institutions including sovereign wealth funds, public and private pensions, foundations and new consultant relationships.”

Rockwood’s predecessor vehicle, which was launched in June 2012, closed in 2013 on $678 million, short of its $800 million target, PERE previously reported. The fund was fully invested by July, according to PERE data. Fund IX had a net internal rate of return of 17.6 percent as of December 2015, according to meeting minutes from New Mexico PERA. The firm declined to disclose more recent performance data.

Fund X is about 30 percent committed, with nine completed investments. Rockwood’s most recent publicly-available transaction was the December purchase of the Watergate, a 12-floor office tower in Washington, DC, for $75 million from local investment firm Penzance, according to data provider Real Capital Analytics.

Rockwood has assets under management of $8.8 billion.