Gerrity Group, a specialist retail property investment business, has secured backing from the Los Angeles City Employees’ Retirement System (LACERS) for its first commingled fund.
The company, set up by GMS Realty co-founder William Gerrity, is seeking $400m (€378m) in capital to invest in shopping centres on the West Coast of the US.
LACERS said it is planning to invest $20m in the fund as part of its emerging managers programme.
According to LACERS board meeting documents, $168m has been raised for Gerrity Fund 2, Gerrity’s first multi-investor fund. Ohio Police & Fire Pension Fund, as reported earlier this month, has committed $120m.
Another $100m is in due diligence and a further $100m is being considered by investors.
Gerrity Fund I was set up for a single investor – an unnamed US endowment fund – with co-investment from the manager.
The entire portfolio for Fund I is now under contract for sale to a single buyer, which could realise a 19.7% net return.
The new fund will seek to generate net returns of 12% by investing in 25 to 30 grocery-anchored shopping centres in the states of California, Oregon and Washington.
Leverage is capped at 65% and Gerrity will co-invest 2% commitments up to a maximum of $5m.
The Townsend Group, LACERS’s real estate consultant, had identified Gerrity Fund 2 as a non-core “best idea” opportunity, according to LACERS documents.
Between 2006 and 2009, Gerrity developed Walmart-anchored shopping centres in China and advised on regional shopping centres in India.
The company is now focusing on investments in the West Coast of the US.