A new investment fund based in Dallas is looking to fill a void in buying properties that may be too large for individual investors and too small for institutional players.
The Valeo Fund, hoping to tap into the pockets of U.S., European and Latin American investors, intends to raise $150 million in equity, which with moderate leverage will provide it with buying power in excess of $300 million.
Valeo is targeting U.S. real estate assets -- office, medical office, retail and debt instruments -- in the $15 million to $55 million range, located in demand-driven/supply-constrained markets.
“What we found from our investor relationships is growing interest by international and domestic investors who are recognizing the value in U.S. commercial real estate as it gets repriced. These investors also have a greater amount of trust in the long term security and stability of the U.S.,” said Fred Hamm, a Valeo Fund co-founder and a veteran money manager for international high net worth individuals.
According to Hamm, “The fund is designed for the sophisticated investor seeking to participate in the coming opportunities in U.S. commercial real estate, but who does not want to make direct investments or be part of a much larger institutional fund. We have limited the size of the fund to ensure we are focused on the longer term capital preservation, cash flow and capital appreciation goals of our investors.”
Hamm has signed up several top CRE execs. Joining him as co-founders and managing directors to oversee the acquisition and management of the fund’s investment properties are:
• Mike Lewis, most recently a top officer at Crescent Real Estate Equities, the former real estate unit of Morgan Stanley, has over 28 years experience managing operations, enhancing property values and advising the strategic direction of more than 43 million square feet of commercial real estate holdings.
• Steve Lipscomb, formerly National Director of Archon Retail, the shopping center platform of Goldman Sach’s Archon Group, guided the underwriting, acquisition, development, leasing, asset management, and disposition of retail properties across the United States. During Mr. Lipscomb’s distinguished 30 year career, he has worked on approximately 20 million square feet of retail properties.
• Jim Yoder, previously a Managing Director of Jones Lang LaSalle’s Investor Services Group, and a former principal of Trammell Crow Company, has been responsible for managing and leasing substantial real estate portfolios, totaling more than 30 million square feet. Mr. Yoder also performed asset management and acquisition services on behalf of institutional and private real estate investors.
“Due to the current state of the U.S. real estate market, there are investment opportunities available for investment funds capable of the opportunistic deployment of capital,” said Lewis. “Our focus will be on acquiring core-plus assets of moderate size, where we see a reduced level of competition.”