Almanac Realty plans $1.3bn capital raise for ARS VIII fund

Almanac Realty Investors’ latest fund is projected to raise at least the $1.26bn (€1.1bn) of capital that went into the previous fund ARS VII in May 2015, sources familiar with the firm’s capital raising have revealed.

The firm has just come to market with its latest commingled fund, Almanac Realty Securities VIII. Almanac Realty itself declined to comment.

According to a board meeting document from the Alaska Retirement Management Board, the real estate manager has begun raising capital for ARS VIII because it has now committed 86% of the capital for the previous commingled fund.

ARS VII has a 20% reserve for follow-on investments, leaving Almanac with additional capacity for one more deal into the fund.

There are two potential deals in the pipeline.

A term sheet – a non-binding agreement on the terms of an investment deal – is in the process of being signed or is negotiation for a $100-150m investment for growth capital for a limited service hotel company.

The manager is also having in-depth discussions regarding a $150-200m investment in a grocery-anchored retail platform.

The ARS fund series is set up to provide growth capital for public and private real estate companies in the US and Canada, and investments include firms focused on property types such as office, industrial, retail, apartments and hotels.

Almanac Realty is also planning to launch two new business operations during 2017, including another commingled fund product called Almanac Horizon Fund, accoridng to a board meeting document.

It plans to raise $200-500m of capital for the fund, which will be seeded with a portfolio of stabilised office and industrial assets the manager controls in the US.

Targeted returns will be 9-10% on an annualised basis.

Almanac has also formed the new business Almanac Realty Public Securities, which will invest in public REITs.

At the moment, the manager is investing capital from within the company in the new firm, but will decide in the future whether to turn it into a full-blown REIT manager.

Almanac Realty Public Securities will invest in North American REITs, with a concentrated portfolio of between 20 and 40 long and short positions.