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Real estate focused Carmel Partners’ latest fund reaches $1bn hard cap in nine months

8 Jul 2014

pile-of-money-1185031-mPrivate equity firm Carmel Partners has held its final close for its Investment Fund V having reached a $1.02bn hard cap,  beating its initial $850m target.

The firm’s fifth US multifamily value creation fund was only launched in October 2013 and has attracted more than 50 LP commitments from existing and new investors.

The vehicle had already reached its target by its second close in March of this year and includes a $25m GP commitment, said Carmel.

The latest vehicle brings the multifamily value creation fund series to more than $3bn since it was launched in 2003.  Carmel’s fourth fund closed on a hard cap of $820m in October 2012, with three quarters of the LPs from that fund reinvesting in the latest vehicle.

The fifth fund attracted new investment from corporate defined-benefit pension plan investors, as well as the usual endowment, foundation and family offices said Carmel.

Carmel founder and CEO Ron Zeff said, “Fund V will seek the best risk-adjusted opportunities across multifamily renovation, development and debt investments in relatively supply-constrained, high barrier-to-entry markets in the United States.

“In the current market cycle, we are continuing to see more development opportunities where we believe our vertical integration enables us to mitigate the risks in execution and construction.

“Therefore, similar to Fund IV, we expect Fund V to have a high percentage of investments in ground-up development.”

Carmel said it would use capital from the fund to invest in multifamily properties in supply-constrained US markets with high barriers to entry. The firm also invests in new development and high-yielding multi-family debt opportunities.

It is believed Carmel tapped Fund IV to co-lead a $9m Series A investment round for hybrid data storage company Reduxio Systems in April of this year.

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