July 2009

Marcus Partners raises $210m for value-added fund

The Boston-based real estate firm expects to formally close the vehicle at the end of the year close to $250m, targeting office, medical office and light industrial in metropolitan areas in the East US.

Newly-formed Marcus Partners has raised $210 million for its debut private equity real estate fund, and is expected to formally close the vehicle at the end of the year with up to $250 million in commitments.

Boston-based investment firm has raised the capital from high-net-worth individuals and institutional investors, who have had previous relationships with founder Paul Marcus.

Marcus set up the firm in June 2008 after he split from longtime business partner Jonathan Davis. The pair had run development company Davis Marcus for around 15 years.

Several former Davis Marcus executives were hired by Marcus. Former AEW Capital director Kyle O’Connor also joined the firm recently as principal to manage Marcus Capital Partners Fund I and have responsibility for investments in Washington DC and the mid-Atlantic region.

He told PERE the firm was in no rush to deploy the capital saying: “It’s fairly early in the down-leg of the cycle but every day we are starting to see more and more interesting opportunities.”

The seven-year, closed-ended fund is aiming for IRRs in the upper-teens, he added, employing a value-added strategy targeting office, medical office and light industrial properties and debt in metropolitan cities in the East of the US. He added that strategy classifications were “blurred” in today’s environment, and that Marcus Partners could do a mix of core and opportunistic-style investing. “In this market flexibility is needed,” he said.

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