Square Mile holds first close on fourth fund

The New York-based firm has raised $255 million of its $800 million target for Square Mile Partners IV, which will seek distressed real estate opportunities across the US.

Square Mile Capital Management has held a first close on its fourth opportunistic real estate fund, which specializes in investments in the distressed debt space. 

Although representatives at Square Mile declined to comment, sources familiar with the situation have told PERE that the New York-based real estate investment firm has closed on $255 million in equity commitments for Square Mile Partners IV. The opportunistic vehicle follows the same investment strategy as the firm’s previous three funds in the series, which target distressed debt backed by all real estate asset classes across the US. 

In total, Fund IV is seeking $800 million in commitments from investors. Although the fund has yet to be marketed officially, Square Mile initially spoke with LPs last fall about investing in a new opportunity fund. PERE understands that existing investors in Fund III participated in Fund IV’s first close. A final close is expected by the end of 2013.

Fund III closed on $806 million in equity during the spring of 2009. It was fully invested by the spring of 2012. Investors in Fund III include the Bush Foundation, the San Bernardino County Employees' Retirement Association, the Teacher Retirement System of Texas, the Fire and Police Pension Association of Colorado and the University of Washington’s endowment, according to PERE Connect. 

Earlier last year, USAA Real Estate acquired a non-controlling interest in Square Mile. In exchange for an approximately 49 percent stake, the real estate arm of the San Antonio, Texas-based financial services firm invested an undisclosed amount of capital in Square Mile upfront and made a substantial commitment to invest in future vehicles.