GI raises $2bn for Fund III, nears full realisation for Fund I

The firm has invested 20% of Fund III's committed capital. It has also realised the real estate portion of its debut fund.

Mid-market firm GI Partners is nearing a reported $2.25 billion target for its third investment vehicle, having raised $2 billion to date from a group of US public pensions.

Its limited partners include the California Public Employees’ Retirement System, the California State Teachers’ Retirement System, the Los Angeles Fire and Police Pension System and the Illinois State Teachers’ Retirement System. 

“We are off to a great start in Fund III, with approximately 20 percent of the committed capital already invested and have a strong pipeline of opportunities,” Rick Magnuson, founder and executive managing director, said in a statement.

Like all of GI's funds, Fund III will invest in real estate, as well as sectors including healthcare, retail, logistics and transportation, media and entertainment, financial services, and technology and telecoms.

The US- and Western Europe-focused firm also said it has fully exited the real estate investments made in its first fund with the $28 million sale of a data centre in Frankfurt.

Its debut fund raised $526 million in 2001, $500 million of which came from the California Public Employees’ Retirement System. CBRE committed the balance.

Roughly $280 million of the fund was invested in 25 technology buildings, such as the data centre it has just sold in Frankfurt. These deals generated more than $1 billion in cash proceeds, representing a 3.7x multiple and 60 percent gross internal rate of return, GI said in a statement.

The remainder of the fund's investments are expected to be exited in the next 12 months. To date it has returned a total of $1.2 billion to investors, resulting in a 32 percent net internal rate of return.

Fund I purchased stakes in companies including Energos, a Norwegian energy company, and NHP Healthcare Partnerships, a UK-based psychiatric rehabilitation business.

The firm’s second fund closed in August 2008, with $1.45 billion in commitments from LPs including CalPERS, CalSTRS, The University of Oregon, ATP and Abu Dhabi Investment Authority.

Before founding GI in 2001, Magnuson was deputy partner of Nomura’s London-based private equity arm. He left Nomura around the same time as Guy Hands, who had established Nomura’s private equity business before going on to found Terra Firma.