DALLAS-After six months of prepping the plan, Macfarlan Capital Partners is ready to launch a $300-million equity fund to invest in commercial assets in distressed markets, innovative real estate products and recapitalizations. The Special Situations Fund I has been seeded with a $75-million, three-property portfolio.

Dean Macfarlan, founder of the Dallas-based investment group, will announce the fund's start at this morning's IMN Real Estate Opportunity & Private Fund Investing Forum in Laguna Beach, CA. The Special Situations Fund I, designed for institutional investors, is projected to yield a 20% gross internal rate of return with a 15% net return for a two- to seven-year investment hold.

The portfolio primarily will be filled with US properties, product of all types including the niche market of high-end residential clubs like the Rocks Resort in Scottsdale, AZ, a 22-acre, ultra-exclusive development of 40 three- and four-bedroom villas with five-star amenities. Macfarlan, using the resort to seed the fund, has sold more than half of the villas to leading destination clubs to set up a 36% projected return. Other seed properties are a 184,000-sf research and development facility, 20 miles south of Washington, DC, and a 288,000-sf two-building complex situated 45 minutes from Manhattan. The Washington, DC-area building, fully leased to a defense contractor, is set to deliver a gross un-leveraged yield to 13% and the New York property, filled by a major chip manufacturer, promises to deliver a leveraged current yield up to 40%.

"We're starting to get enough good feedback that we feel we'll have all this money pulled together in the next six months," Todd White, Macfarlan's acquisitions partner, tells GlobeSt.com. He says the portfolio properties will hold true to the firm's historical $15-million average. He's projecting the special fund will be fully deployed within 30 months of all commitments being placed.

Based on demographics trends, White expects 25% will be spent on health-care properties, 25% on high-end hospitality assets and the other half on a broad-based spectrum of special situations, including development. "We are prepared to do any asset class, anywhere," he says.

The Macfarlan strategy is providing "an alternative product in investment," White explains, citing the abundance of ready capital for core value-add and core-stabilized assets. "This will provide something a little different. We feel based on our history and track success in penetrating special situations and ability to source special situations makes it the right time."

Macfarlan says a 48-month pilot program resulted in a 34% internal rate of return from 22 transactions. "The old model of real estate investment--big personalities taking big risks investing in trophy properties or other core assets--just doesn't make sense today," the firm's founder says in a prepared statement. "At a time when some investment managers continue to pump capital into over-inflated core properties, we are looking at how to capitalize on emerging trends and quickly create investment opportunities. America's aging demographic has created a host of opportunities that we've identified, invested in and seen perform beyond expectations."