NORTH AMERICA – The Encore Housing Opportunity fund has reached the $200m (€156.2m) level for raising capital for its Encore Fund II commingled fund.
Oscar Vasquez, chief operating officer, said: "We feel good about where we are and are hopeful of having a final closing in the first quarter of 2013, with a total raise in the range of $400m-$500m."
Encore Housing has attracted a mixture of investors so far, including a combination of family offices, high-net-worth individuals, hedge funds and other institutional investors, including a Switzerland-based insurance company.
The fund manager is projecting investors will achieve a 21% net IRR.
There will be no leverage placed on the fund.
Encore Fund II is an opportunity fund able to invest in residential land and partially completed residential projects. Around 30% of the fund will be invested in multi-family real estate.
"The messier the project is, the better it is for us," Vasquez said.
In some cases, Encore will handle the development itself, in addition to selling off lots to homebuilder groups.
Encore Housing has already invested $25m in two projects – $17m in the Twin Creeks project in Jacksonville, Florida, and $8m in San Diego's Laurel Creek development.
Encore is focusing on the states of California and Florida, and particularly on Los Angeles, Orange and San Diego Counties, Miami, Orlando, Jacksonville and Tampa.
The company is looking to invest $5m-$50m per transaction, favouring projects that are in in-fill locations and have "some complex issues to deal with".