UNITED STATES - Federal Capital Partners has closed its first commingled fund with a capital raisin of $230m (€168.5m) through FCP Fund I.
"Our goal with the first fund was to go out into the market with a small capital raise and get it invested quickly. But our next fund will be much larger," said Stephen Walsh, senior vice president of capital markets for Federal Capital.
Once leverage is placed on the fund, the total capital available will be in the region of $800m- $900m.
FCP Fund I raised capital through major US pension funds and other institutional investors but FCP itself has a history of investing capital in individual properties through opportunity fund managers such as Angelo Gordon & Co.
Investors in the commingled fund are projected to achieve mid-teens leveraged IRR over a three-year holding period.
There are now two Maryland apartment block assets in the value-added commingled fund - the 598-unit Park Berkshire Apartments in Forestville, and the 242-unit Toledo Place Apartments in Hyattsville - alongside a 432-unit known as the Monterey complex in Bethesda, Maryland, acquired with capital from Angelo Gordon.
The amount invested in these three properties for purchase and renovation purposes is approximately $200m.
"We have the capability in-house to do the renovation work ourselves. This means that there will be no fee charged to a third-party management company," said Walsh.
The commingled fund will look to make further debt and equity real estate investments in the US mid-Atlantic region, including mezzanine investments.
The firm is also seeking to invest in office, industrial, retail, residential real estate and land.
Federal Capital is led by founders Esko Korhonen and Lacy Rice, former principals with opportunity fund manager The Carlyle Group, and supported by Tom Carr, former chairman and chief executive office of CarrAmerica Realty, a publicly-traded REIT.