Stamford Capital Investments (SCIM), the investment management arm of commercial property finance powerhouse Stamford Capital, has launched its fourth fund, seeking to raise $100 million from wholesale investors. It expects to raise $30 million by the end of January for the fund’s first close.
Core Partners Fund 4 (CPF4) is the largest in SCIM’s series to date and will build on the success of its previous three funds, which average a return of 18%. Since its formation in 2012, SCIM has funded over 90 investments comprising over $630 million of principal, primarily invested in equity opportunities.
The new opportunistic fund is targeting 15% IRR net and is sourcing national investments including real estate backed equity and joint ventures, preferred equity, and first and second mortgage debt.
Operating as a closed-end unit trust, CPF4 has a 2.5-year investment period in which investments and reinvestments can be made. This is followed by a two-year period for investments to be realised and capital paid to investors.
SCIM says it’s maintaining its position higher up in the capital stack in equity as liquidity remains buoyant in private credit with heightened competitive tension in arranging debt finance.
“The private credit market is crowded. Fortunately, we are in a very unique position having access to Stamford Capital’s market intelligence and strong deal flow. Our funds sit next to what is arguably the biggest net in the ocean. At any point in time, our brokerage team is engaged on over 350 capital transactions – this puts us at the coal face of the industry,” said Michael Hynes, SCIM’s Group Executive Director.
“Not only can we be discerning about who we partner with, but the size of our pipeline also powers our knowledge base. We are witnessing in real-time the issues developers are facing, which also helps us price capital. This intel is second to none.” According to Hynes, SCIM anticipates investors will predominantly comprise many investors who have invested with them since the beginning, with investments as low as $100,000.
“There are pockets of opportunity in residential with the obvious supply and demand imbalance. We also see solid trading potential in the commercial, industrial and retail sectors and like to acquire assets with historical leases that we can either recalibrate or trade,” Hynes said.
Testimony to the sustained demand for quality residential stock, SCIM raised $6,005,000 in equity and entered into a joint venture with Carpe Group to develop a boutique 27-apartment complex in Kew in Melbourne’s East. With completion imminent and just one apartment left for sale, investors are forecast to receive a net IRR of 19%.
Capitalising on the robust nature of Brisbane’s industrial sector and its historically low vacancy rates, SCIM entered into a joint venture arrangement with logistics real estate investor and operator Lindum Property Partners. The partnership acquired three industrial sites in Queensland, seeking to add value through minor upgrades and market rent reversions.
The collaboration raised $10.22 million and deployed this capital to snap up an under-rented office-warehouse in Darra south-west of Brisbane, two adjoining under-rented strata units in Brendale north of Brisbane, and a freestanding vacant industrial property on the fringe of Brisbane CBD in Mansfield that was refurbished prior to being fully leased.
The Mansfield refurbishment delivered investors a return of 182% – substantially greater than its forecast IRR of 37%.
A major differentiator in the funds management arena, SCIM has direct access to Stamford Capital, Australia’s largest commercial real estate debt origination business. This unlocks access to leading market insights, lender relationships, and exclusive deal flow.
“Our investors are valuing our unique access to deals in this market,” Hynes said.
Stamford Capital has a current pipeline of $6 billion in deals. In FY24, it wrote over $2.5 billion in loans and is forecast to exceed $3 billion in the current FY. Stamford Capital Investments (SCIM) is an investment manager providing investors with exclusive investments and secure risk adjusted returns in commercial real estate. Since 20212, it has partnered with experienced real estate sponsors via subordinate debt and principal equity in both value-add and real estate investments and developments.
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