Siguler Guff has closed on $877 million for its latest real estate fund, Siguler Guff Distressed Real Estate Opportunities Fund (DREOF) II, exceeding its initial $750 million target. The vehicle is said to be the largest US multi-manager real estate fund raised to date.
The New York-based private equity firm held a first close of $100 million for the fund in August 2013, according to filings with the US Securities and Exchange Commissions. Limited partners included the Contra Costa County Employees’ Retirement Association (CCCERA), which committed up to $80 million in July 2013 and Oklahoma Police Pension & Retirement System, which earmarked $10 million last October.
DREOF II is the successor fund to DREOF I, which was launched in 2010 and raised a total of $630 million. The fund’s portfolio is expected to be composed of 12 to 15 real estate manager relationships, with at least 60 percent of the capital to be invested in funds and separate accounts and up to 40 percent in co-investments, according to a firm presentation to CCCERA. Up to 45 percent of the vehicle’s capital may be invested outside of North America, primarily in Europe. Approximately 70 percent of the fund already has been committed.
“We form partnerships with managers who have sell discipline and historical competitive advantages to create a unique mix of fund investments, joint ventures and co-investments on attractive terms,” said James Corl, managing director and head of real estate investments for Siguler Guff, in a statement.
“For DREOF II, in addition to the US market opportunity, we expect to see significant acceleration in the volume of distressed commercial real estate opportunities coming to market in Europe,” said Drew Guff, managing director and founding partner of Siguler Guff. “We are well-positioned to leverage this opportunity with the recent opening of our London office and with Nestor Weigand, principal and a senior member of the investment team, now based in London.”