LOS ANGELES, Dec. 8, 2015 /PRNewswire/ -- Ethika Investments, LLC, a U.S.-based real estate private equity firm, has launched a new real estate fund focused on opportunistic investments in the top 30 U.S. markets that will create value through significant renovations and operational improvements. Named the Ethika Investment Diversified Opportunity Fund II, the platform is targeted to attract $250 million in equity capital from both new and existing investors, resulting in nearly $1 billion of new acquisitions over the next several years.
Ethika Diversified Opportunity Fund II will adhere to Ethika Investments' vertically integrated investing approach that includes sourcing real estate assets with positive fundamentals in compelling locations at prices below historical values and replacement costs. The launch comes on the heels of full deployment of Ethika Diversified Opportunity Fund I, expected to deliver a net internal rate of return of 22.3% and a 2.1x net equity multiple to investors after investing in 17 properties across 13 different markets.
Beginning immediately, the Fund's leadership team will identify and evaluate new potential investment opportunities in the country's top markets, particularly those that exhibit steady growth in key industries including financial services, energy, technology, health care and education. Individual investments will range in size from $25 million to $150 million for individual properties and multi-site portfolios. The Fund will seek to enhance the properties it acquires through targeted physical upgrades, property management improvements and new marketing initiatives, with the ultimate goal of drawing private and institutional buyer interest in the enhanced assets.
"Nearly six years beyond the last period of significant commercial real estate acquisition, now is an opportune time for Ethika to launch our second fund dedicated to seeking out value-add investments, with a focus on maximizing end values," said Ethika Investments co-founder Andres Szita. "These underperforming assets are still very well-priced with a great deal of upside potential, versus core real estate assets that have been overbought and overpaid for over the last several years."
Like Ethika's first fund, the Ethika Diversified Opportunity Fund II is tailored to fit the needs of high net worth and family office clientele, as well as public pension funds, foundations, endowments and other institutions. Nearly 45% of Ethika's investors hail from overseas, a result of the firm's efficient tax structuring, the availability of a Sharia-compliant feeder, presence in key international financial gateways and its vertically integrated platform that often results in lower fees and higher returns.
To enhance the organization's industry-leading reporting practices, Ethika recently held its first annual investor conference for partners on November 15-16. Hosted at the Marriott Warner Center (an asset in the Diversified Opportunity Fund I portfolio), the well-attended event drew nearly 60% of investors in the first fund, hailing from as far away as the Middle East and South America. The conference highlighted the fund's progress since 2012 as well as the increased level of activity of the U.S. public and private debt and equity markets.
Ethika Investments is a real estate private equity firm formed to provide investors access to a unique platform by tactically investing in opportunistic real estate assets, primarily in the United States. It is affiliated with Laurus Corporation, a real estate investment and development company that specializes in hotel & resorts, office buildings, multifamily and mixed-use properties.
SOURCE Ethika Investments, LLC