PIMCO has held an interim close for its latest real estate fund on $1.5 billion, according to a Monday filing with the Securities and Exchange Commission.
Newport Beach, California-based PIMCO is targeting between $3 billion and $4 billion for its third fund, PIMCO Bank Recapitalization and Value Opportunities Fund III, with a $5 billion hard-cap, according to February meeting materials for the New Mexico State Investment Council. NMSIC earmarked $100 million for the fund, Private Debt Investor previously reported.
The firm, which could not be reached for comment, held a first close for BRAVO III in November on $820 million and had raised $1.2 billion as of December 30, according to NMSIC meeting materials. BRAVO II closed on $5.5 billion in 2013.
With capital from the latest fund, the firm plans to invest in private and public debt and equity. About 40 percent of the portfolio will be in residential lending and land; 40 percent in commercial loans and direct real estate; 10 percent in specialty finance; and 10 percent in other opportunities, including distressed credit.
PIMCO is targeting a 14-16 percent net internal rate of return and a 1.7x–1.9x multiple for its third real estate fund. NMSIC’s investment in BRAVO II had generated an 11.9 percent IRR as of December 31. The firm charges a 1.5 percent management fee on invested capital and 20 percent carried interest for the fund.
PIMCO had invested 10 percent of BRAVO III’s capital as of December 31, according to the NMSIC documents. Other investors in the fund include the Teachers’ Retirement System of the State of Illinois, which earmarked $100 million, and the Arkansas Local Police and Fire Retirement System, which committed $10 million, according to PDI data.