Cypress considers second real estate private equity fund after hard cap close for debut

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BassettPlaceMall_2_1Cypress Equities Real Estate Investment Management has one eye on a follow-up fundraise to the $400m debut private equity real estate vehicle it closed this week, AltAssets has learned.

The firm has already invested or allocated almost half of its debut fund according to senior vice president Scott Goslee, who said it was likely to head back into the market when that level hits 80 per cent.

He said, “It’s just a matter of timing.”

The Texas-based firm launched the fund in 2012, taking two years to close but finishing over its target by $100m.

Goslee puts the success of the fundraise down to capital chasing yield as well as its affiliation with SRS Real Estate, which has 20 offices across the US and is able to help Cypress make connections and provide market intelligence.

He adds that having a real estate private equity fund makes sense to investors because the discretionary capital is ready when an opportune sale is due to be executed, meaning Cypress can get the best price on a property deal.

He said, “In real estate, a lot of the money is made on the getting the right price, it is one of the most important criteria of execution.”

The fund’s investor base includes public and corporate pensions, sovereign wealth funds, family offices and fund of funds investors.

Goslee said the fund would targets a 17.5 per cent return.

The group focuses on acquiring value-add retail real estate. So far it has bought more than $700m in real estate assets, including the Lloyd Center in Portland, the Eden Prairie Center in Minnesota and Glendale Marketplace in Los Angeles.

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