BayNorth Capital closes $430m fund

The Boston private equity real estate firm closed its sixth fund on $430m, six months after spinning out from Charlesbank Capital Partners.

Boston-based private equity real estate firm BayNorth Capital has held a final close on BayNorth Capital VI, a $430 million (€330 million) fund focused on US residential and commercial real estate investments. The firm expects to invest in over $1 billion of real estate assets.

The current fund represents BayNorth’s sixth investment vehicle and its first since the firm was spun out of Boston-based private equity firm Charlesbank Capital Partners in July 2004. The fund, launched shortly thereafter, exceeded its initial target of $400 million.

BayNorth principal Charlie Wu, who co-founded the firm with Chip Douglas, noted that the firm’s reception in the fundraising market was fairly positive. “We had the track record of five previous funds and virtually all of our Fund V investors re-upped. That was half the battle. We also wanted to get in a few new investors, which we were able to do.”

Charlesbank, formed in 1998, is the successor firm to Harvard Private Capital Group, a private equity and real estate investment arm of Harvard Management Co. Wu noted that Harvard has invested in all six of BayNorth’s funds. The current fund attracted a total of thirty-one limited partners.

BayNorth Capital VI will invest between $15 million and $50 million per transaction, generally teaming with local operating partners before making an investment. Wu said the firm’s typical holding period is approximately three to six years.

BayNorth continues to share office space with Charlesbank and the two firms have co-invested in certain projects. BayNorth also manages Charlesbank’s $600 million real estate investment portfolio.