AllianceBernstein has closed its first private equity real estate fund, AllianceBernstein US Real Estate Partners, LP, with capital commitments of USD680 million.
Commitments to the Fund were received from several large, global institutional investors, including Temasek, the Singapore-based investment company, Alberta Teachers Retirement Fund, as well as institutions from the US, Hong Kong and Japan. In addition, numerous AllianceBernstein private clients and employees made commitments to the Fund. With additional co-investment capital from key strategic investors, the Fund could have approximately USD900 million of available equity.
The Fund represents an important milestone for AllianceBernstein, which formed the Real Estate Group in September 2009 in order to build out a preeminent private equity real estate platform by leveraging the firm’s current resources and existing infrastructure. The Real Estate Group is led by co-CIO’s Brahm Cramer and Jay Nydick (pictured) as well as managing director, Adam Brooks. Cramer and Brooks each spent their careers prior to joining AllianceBernstein with Goldman Sachs. Cramer co-headed the firm’s Real Estate Principal Investment Area and Brooks built and led the firm’s real estate mezzanine investing businesses. Nydick had most recently been the President of iStar Financial, the NYSE listed real estate specialty finance company, where he built several innovative new credit-based businesses.
"As a first time fund, we are thrilled with the success of our capital raise within a very difficult fundraising environment," says Brahm Cramer, co-CIO of the AllianceBernstein Real Estate Group. "We believe this is a credit to the AllianceBernstein network, the favorable investment environment for real estate and the early investments we have made. We are excited to partner with investors who share our strategic vision of creating value through the resolution of complex restructurings and recapitalizations of distressed real estate assets across the US.”
To date, the Fund has committed more than USD200 million of equity across six separate transactions. These investments include recapitaliSations of distressed loans secured by office buildings in San Jose, California and suburban Seattle, a limited service hospitality portfolio and a residential land site in New Jersey. The Fund has also made direct real estate acquisitions including multifamily portfolios in Manhattan and in the Southeast US.
"We are pleased with the pace of investments and the make-up of the current portfolio," says Nydick, the Real Estate Group’s co-CIO. "We believe the current investments confirm our ability to execute our strategy and to generate attractive risk-adjusted returns through the resolution of situational distress."
The Fund is actively seeking debt and equity investment opportunities across all property types and geographic locations throughout the United States with a current focus on the recapitalization of distressed assets. The Fund is looking to make investments of USD20-100 million per transaction and expects to invest in partnership with talented local market operators, existing owners of assets and in conjunction with borrowers seeking to recapitalize assets or entities.
