TruAmerica Closes First Discretionary Fund with $ 575 Million in Equity

TruAmerica buys value-added sites like Concord Apartments in Raleigh, NC

Century City-based real estate firm TruAmerica Multifamily closed its first discretionary fund with $ 575 million in equity commitments. This exceeds the target of $ 400 million set for the TruAmerica Workforce Housing Fund.

TruAmerica frequently uses joint venture partners, but Robert Hart, the company’s founder and CEO, said fundraising gives TruAmerica more freedom.
“When you have a joint venture – we have 30 partners in our different joint ventures – they all have different reporting methodologies and accounting systems and ways of working with their partners,” Hart said. “When you have a fund, it’s like having one partner; there is a reporting system and a methodology. It is a more efficient vehicle, and its capital (easier to access). You have discretionary power over the capital within an investment firm. When you don’t have the funds, you don’t work at your own discretion. All approvals depend on the partner.

Hart said of the fund: “It’s a way to increase your assets under management and close deals without having to dig for money. It’s a competitive advantage.

TruAmerica has over $ 15 billion in assets under management, making it one of the largest owners in the country. It focuses on the housing of the workforce.

“We are dedicated exclusively to value-added apartments, apartments that need to be modernized and repositioned and we have a particular focus on Class B and workforce housing,” Hart said. “Our clients are blue and gray collars. We believe that institutional capital, the kinds of people who invest in funds like this, are the right source of capital for a long term investment in apartment buildings.

More than half of the fund’s equity commitments come from new investors. They include foreign and domestic insurance companies, public and private pension funds, global asset management companies and family offices.

“The fund is an evolution of our successful institutional joint venture platform, which has helped us become a leader in the multi-family investing industry in a relatively short period of time. The workforce housing sector has continued to perform well over the past decade and has demonstrated its sustainability even during the worst part of the pandemic. Our long-term vision for this space is shared by a growing number of investors, ”CEO Mark Enfield said in a statement.

TruAmerica has done around $ 1 billion in transactions over the past few years, but this year it has made closer to $ 3 billion. The company focuses on growing markets in the Southwestern United States and is also active in the Southeast and recently opened an office in Texas.

Hart said the company avoids putting more than 10% to 15% in units on top of the purchase price.

Going forward, Hart said, the company will grow geographically as it strengthens its presence in Texas and the Midwest, and will continue to add $ 1 billion per year in new assets under management.

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