UNITED STATES - Hawkeye Partners is about to begin the process of allocating equity it raised through its Scout Fund to emerging managers.
The commingled fund manager raised in excess of $650m ($480.3m euros) for the fund through a select group of institutional investors, including the likes of Pennsylvania State Employees Retirement System, Wisconsin State Investment Board, California State Teachers Retirement System, Teachers Insurance and Annuity Association and the pension fund of the United Nations.
As a result, Hawkeye Partners has started bringing in some emerging managers for interviews about being awarded capital.
Headwaters Development was one of the early firms to be invited for an interview so it is anticipated around 25m to $50m of capital will be warded to the company in August or September.
Headwaters Development was created by Jose McNeill, a former portfolio manager with the California Public Employees Retirement System who is now seeking funding for an industrial development program in Northern California.
Original plans for the Scout Fund were to award allocations to emerging managers of around $100m but the proposal has now changed as the company has found there are some good managers to invest with but who don’t need that much capital immediately.
On the back of its capital raising and investment, pension funds are projected to achieve an IRR in the range of 12% to 15% from the commingled fund as the Scout Fund will receive up to 35% of the profits of any emerging manager awarded capital.
The Scout Fund will be hiring managers that have either a national or regional geographic operation while most are required to have expertise with four main sectors of office, industrial, retail and apartment property types. That said, some specialist managers wikll also be considered.
Capital presented to managers by the Scout Fund will then be used to buy existing properties or start development programmes.