BOSTON—Rockpoint Group LLC said Thursday it hadclosed its first lower-risk, lower-return coreplus investment vehicle, Core Plus Fund I. The fund closedat $950 million in equity commitments, including co-investmentcommitments, slightly short of the $1-billion ceiling thatBoston-based Rockpoint set when fundraising was launched about sixmonths ago.

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Historically, Rockpoint has sponsored opportunistic funds,having raised more than $8 billion of equity capital for thesefunds since the company was launched in 2003. That includes itsmost recent opportunistic fund, Rockpoint Real Estate Fund IV,which closed in March 2013 and aggregated $2.33 billion ofcommitments, including $380 million in co-investment capital.PERE reported Wednesday that Real Estate Fund V has beenlaunched, with a $2.5-billion target. In addition, the core-plusfund that closed this week is likely to be the first of a seriesfrom Rockpoint.

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Core Plus Fund I was not formally marketed and was raised from asmall group of primarily existing investors, Rockpoint said. Nobrokerage commissions or placement fees were paid in connectionwith the fund.

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Rockpoint expects that Core Plus Fund I will be complementary toits opportunity funds and will leverage Rockpoint's sourcing andasset management expertise to target lower-risk, lower-returninvestments in the United States. Rockpoint expects to focus onhigh-quality assets in top tier markets, and is seeking 11% to 12%percent gross returns, compared to a reported 16.5% returns forFund IV, with leverage of no higher than 50%, according toPERE. The fund, which has not yet been deployed, isexpected to hold its investment for five to seven years.

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PERE reported that Rockpoint entered the core-plusmarket at the request of several of its existing limited partners,which saw its sourcing and asset management expertise inopportunistic real estate as quantities that could easily transferto lower-risk, lower-return investments. TheRockpoint team had passed up several core-plus opportunities overthe years while sourcing deals for its opportunistic funds.

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Rockpoint's entry into the core-plus arena occurs as other majorprivate equity firms have pursued similar initiatives. TheBlackstone Group, for example, launched acore-plus vehicle at the start of 2014.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.