UNITED STATES - Smaller retail properties are among the most difficult for pension funds to buy on their own in the United States – at least that is what Phillips Edison & Company is banking on as it prepares to market its next commingled fund.
The PECO Opportunity Fund IV is designed to encourage total equity in the region of $500m ($362.4m euros) to $550m, having raised half of that maximum for version III in 2005.
The marketing process for the new fund is expected to begin in August but there have already been some initial discussions with investors, based in the US and overseas in earlier funds, including government pension funds and fund of funds mangers.
The firm applies a value-added investment strategy to all of its commingled funds but specializes in the acquisition, redevelopment, leasing and management of anchored neighborhood and community shopping centres in the US so is looking at a variety of single property purchase deals, as well as having the capability to acquire multiple properties.
Phillips Edison proved this earlier this month with the acquisition of a significant portfolio from Developers Diversified Realty Corporation which had an initial closing of 52 properties for $449m and the ability to buy 11 properties at a later date for another $154m.
Mike Phillips, president of the company, said, "We think that our recent track record of being able to find and close deals should attract a lot of investors to our next fund. Smaller retail properties can be hard for pension funds to find on their own. This is one of the reasons why we think that we can make our next commingled fund twice as large as our previous one."
