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April 03, 2019  

Value-Added Artemis Fund Corrals $1 Billion

Artemis Real Estate has raised $1 billion of equity for its third and largest value-added fund.

The Chevy Chase, Md., investment manager easily surpassed its $750 million equity goal. The final close was held two weeks ago.

The vehicle, Artemis Real Estate Partners 3, is shooting for a 14-15% return by acquiring value-added and opportunistic properties, as well as distressed debt. It invests across property types nationwide, with a focus on middle-market deals that attract less competition from giant institutional investors. With leverage, the fund has $3 billion of buying power.

The fund’s first close was held at yearend 2017, with $661 million of equity commitments. So far, some 15% of the vehicle’s total equity has already been deployed.

Artemis, which didn’t use a placement agent, has told investors that 93% of limited partners in previous Artemis funds re-upped in the new vehicle. Investors in Fund 3 include Cook County Pension, District of Columbia Retirement Board, Illinois Municipal Retirement, New York State Teachers and Virginia Retirement, according to Preqin.

Fund 3 is nearly twice as big as the $580 million Fund 2, which held a final close in 2014 and is fully invested. The first fund in the series completed raising $436 million of equity in 2012.

Artemis teams up on investments with established and emerging local operating partners to gain access to opportunities across the risk spectrum that are often unavailable to larger shops, according to its website. To date, the firm has formed joint ventures with more than 70 operators.

The shop, formed in 2009 by veteran investors Debbie Harmon and Penny Pritzker, is one of the country’s largest women-owned real estate shops. Harmon and president Alex Gilbert run the day-to-day operations.

Aside from its series of value-added vehicles, the firm manages a $475 million healthcare fund and a core-plus fund that has raised $507 million toward its $750 million equity goal. Artemis Healthcare Fund 1 targets a 10-11% return via equity and debt investments in independent-living, assisted-living and memory-care facilities, as well as medical-office buildings. Artemis Income & Growth Fund aims for a 9-11% return via acquisitions across asset classes.

The company also manages separate accounts for institutional investors seeking core or core-plus returns. Artemis places that capital with emerging managers.

All told, Artemis has raised $4.3 billion of equity across its investment vehicles.