Stockbridge Hits $225MM Capital Raise for New Commingled Fund with San Francisco in Sight

GI Partners, Bay Area, GI Real Estate Essential Tech + Science Fund, Hayward, Redwood City, Santa Clara

By Jon Peterson

Stockbridge Core and Value Add Advisors has finalized the first closing on its new commingled fund called the Stockbridge Value Fund IV. The capital raised at this time is $225 million, which represents 45 percent of the fund manager’s $500 million targeted capital raise over the past six months, according to industry sources.

Stockbridge will be looking for investments in the San Francisco Bay Area and Seattle region as two of its targeted markets for the new commingled fund, although the company overall has a nationwide investment strategy.

The fund manager has kicked off the commingled fund as a blind pool investment. In this scenario, Stockbridge will have no assets in the commingled fund as it raises the capital. The company is deliberately doing this in order to have dry powder in the current environment allowing it to take advantage of market dislocations.

The new commingled fund could be the largest that Stockbridge has in its value-add fund series. Fund III was its previous largest fund, where the manager had a final close of $355 million capital raised in April 2018.

Stockbridge has attracted capital so far from a variety of capital sources for Fund IV. Two of the investors that participated in the initial capital raise were the Texas Municipal Retirement System and Montana Board of Investment. Both of these investors had placed capital with Stockbridge previously.

The fund manager will be looking at a multitude of property types. These include multifamily, industrial, retail and traditional office/medical office properties. It wants to invest in assets where it can buy properties at discounts to replacement cost where buildings are undervalued, underutilized or otherwise not operating at their full potential.

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