Vestar has launched its first investment fund with an eye toward raising $250 million in equity by mid-year 2012. The fund, Vestar Strategic Retail Partners, will serve as the firm’s exclusive vehicle for property acquisitions, focusing on investments ranging from $20 million to $100 million for value-added retail properties in the western and southwestern US. Vestar is targeting state, municipal and corporate pension funds, as well as endowments and potentially high-net-worth individuals and families, as investors.
“We believe this is a great time to invest in value-added retail properties,” said Bob Cavanaugh, the firm’s chief investment officer, who will be overseeing the fund. “With our firm’s track record of acquiring and stabilising struggling assets, we are confident that our in-house capabilities will create meaningful value for the fund’s investors.”
Vestar typically buys and repositions retail properties with a three- to seven-year hold period and targets leveraged returns in the mid- to high teens. The Phoenix-based firm has acquired more than $400 million in shopping centers with institutional partners over the last two years and currently manages more than 21 million square feet of retail space in Arizona and southern California.
Stephen Inc., a Dallas-based investment bank, is marketing the fund to investors.