Investment manager closes capital on its largest fund since its founding in 2001; capital to be deployed in value-add investments in multifamily communities
Covenant Capital Group, LLC (Covenant), a leading real estate investment manager focused exclusively on value-add investments in apartment communities in the United States, today announces it has closed on the largest fund in the firm’s 18 year history.
On December 6th, Covenant Apartment Fund IX, L.P. closed with $395 million of committed capital. Covenant started Fund IX with a target of $300 million, a number it surpassed by $95 million. Fund IX is 52% larger than Covenant’s prior fund, Covenant Apartment Fund VIII, L.P., which began acquisitions in 2015 and has fully invested all $260 million raised.
Since 2001, Covenant has raised more than $1.3 billion of capital to invest in apartment communities, solidifying the firm as a national leader in value-add investments in the multifamily sector.
“We’re proud to close on our largest fund yet with Fund IX,” said Govan D. White, managing partner and co-founder of Covenant Capital Group. “The increased Fund size is a testament to our apartment-focused, value-add investment strategy as well as the demonstrated ability of our team to execute. We look forward to deploying this capital to revitalize properties acquired through Fund IX into premier, institutional-quality assets.”
Fund IX plans to invest more than $1.2 billion, including debt, in approximately 25 to 30 multifamily assets over the next three years. To date, Fund IX has already closed on or committed to 10 transactions, with over $400 million in total capitalization.
Covenant is co-managed by managing partner Rick Scarola who founded the firm with White. Now having worked together for many years, the firm’s leadership team has operated through multiple economic cycles to refine its strategy in a multitude of conditions. Covenant’s clients are a diversified mix of public and private retirement systems, foundations, endowments and private investors.
“Our value creation efforts have allowed us to acquire and reposition over 170 apartment communities since 2001 with an aggregate value of more than $2.2 billion,” added White.
Covenant will continue to seek to identify apartment communities in well-located, supply constrained markets that appear to have temporary or correctable flaws in the physical attributes, capital structures, tenancy and market position.
While the firm’s acquisition and revitalization process has long been driven by its own robust environmental, social and governance (ESG) policy, Fund IX will be Covenants’ first fund fully executed as a signatory of the United Nations-supported Principles for Responsible Investment (PRI). The PRI initiative is recognized as the leading global network for investors and financial industry participants who are committed to integrating ESG considerations into their investment practices and ownership policies. Covenant was the first investment firm in its home state of Tennessee to sign on.