REAL ESTATE – US-based BayNorth Capital LLC has completed raising capital for its latest investment fund, BayNorth Realty Fund VII, with a total of $472.5m (€356m) contributed.
One of the more significant investors in the fund was the Harvard University Endowment Fund. Other investors in the commingled fund were a mixture of other endowments, pension funds, foundations, banks and family trusts.
Some 12 of the 40 fund investors had never invested with the company before.
Chip Douglas, co-founder of Bay North Capital said: "I think there are several reasons why we continue to attract institutional capital. We have a long-term successful track record, given the number of commingled funds we have managed in the past. Our management team has proven we can go out into the marketplace and make deals happen in a timely manner."
Investors in Realty Fund VII are projected to achieve leveraged IRRs of around 20%. This yield assumes a three- to five-year holding period.
BayNorth Capital has a four-year investment period to find all of the transactions for the commingled fund, which currently holds no assets.
Douglas added: "We are now working on the first investment for the fund. These are some apartment complexes in the Pacific Northwest. We are hopeful of having a closing soon."
The total capitalisation of Realty Fund VII is projected to be over $1.7bn. The investments will be structured as straight equity or mezzanine debt. Deals will be considered in the major US metropolitan areas.
A range of property types will be considered including offices, retail, apartments, industrial, hotel and self storage. The deals would be straight acquisitions, there could be development, redevelopment, repositionings and recapitalisations as well. The deal size for Realty Fund VII will be from $15-$50m.
BayNorth Capital typically arranges transactions in joint ventures with local developers or operating partners. The company likes to arrange transactions with many of the same firms involved in several deals.