PCCP, a Century City-based private equity real estate investment firm, raised $1 billion for its PCCP Equity VIII fund.
The fund is the second largest in PCCP’s 21-year history, following a $1.25 billion fund that closed last year and focused on real estate credit.
In line with its typical approach, PCCP intends to invest the funds in transitional real estate across the United States.
“We are looking for investment opportunities in office buildings, apartments, industrial and logistics facilities, and retail,” PCCP Founding Partner William Lindsay said in an email. “We generally focus on assets that need capital and management to maximize their value.”
It took roughly 15 months to raise the capital for PCCP Equity VIII, according to Lindsay. The firm began investing in the fund in 2018 and closed it to new investors at the end of September.
Lindsay said the fund’s size is the result of the evolution of PCCP, which has nearly $10 billion in assets under management. He estimates that his firm will finish investing the PCCP Equity VIII funds over the next 18 months.
Eric Sussman, an adjunct professor at the UCLA Anderson School of Management, said the $1 billion fund is consistent with fundraising trends in the private equity real estate market.
“There’s plenty of liquidity and strong interest in real estate right now,” Sussman said. “It is one of those places where you can still find some yield.”
Sussman pointed to the record-breaking $20.5 billion fund raised by New York private equity firm Blackstone Group Inc. in September — the largest real estate fund in history. “The (PE real estate) market is in good shape, especially from a fundraising standpoint,” he said.
Sussman added that while capital from funds such as PCCP’s Equity VIII are not cheap relative to more traditional lenders, groups will often use them for the more flexible loan options they provide.
“You might need bridge financing. Banks don’t underwrite that,” Sussman said. “Often a bank is going to have to give you a line of credit, give you two different loans. … PCCP can give you a single package.”
The majority of the $1 billion in the PCCP Equity VIII comes from institutional investors, approximately one-third of which are located in Asia, Europe or the Middle East. Commitments from public and private pension plans make up roughly half of the total fund.
