Impact-oriented private markets firm Vistria Group is exploring a real estate investment strategy and “intends to raise a real estate-focused product in 2023”, according to documents prepared for the Connecticut Retirement Plans and Trust Funds.
Per Vistria’s website, the firm seeks to achieve “significant financial returns combined with positive social change for communities across America”, operating at the “intersection of purpose and profit”. The firm recently hired the Global Impact Investing Network’s chief impact officer Kelly McCarthy as its new head of impact.
A real estate strategy would represent a new area of activity for the Chicago-based firm, which has to date raise four private equity funds and last month closed its debut credit fund on $715 million.
Vistria’s real estate intentions were first signalled in July 2022 when the firm hired Margaret Anadu as senior partner and head of real estate in New York. Anadu joined from Goldman Sachs where she chaired the urban investment group.
“I am excited to join the team and help scale Vistria’s platform to expand its offerings,” Anadu said at the time. “Real estate is an effective tool to create positive societal change in communities and presents a significant commercial opportunity.”
The pension documents prepared for Connecticut give no indication of how the real estate strategy will develop and Vistria did not respond to a request for comment. Vistria’s existing two strategies – private equity and private credit – focus on the same sectors of healthcare, knowledge and learning and financial services.
The real estate impact fund market is starting to blossom: affordable housing is a prevalent theme, while a more diverse range of fund offerings is starting to target socially important sectors such as healthcare, social care, assisted living and community regeneration.
As well as planning a push into a new asset class, Vistria is targeting significant growth in private equity; it is currently seeking at least $4 billion for its fifth flagship private equity fund with a $5 billion hard-cap, according to the Connecticut documents. It closed the fourth fund on $2.68 billion in June 2021. According to the documents, Vistria has already received $680 million in commitments for the fifth fund and expects to close in the second quarter of this year. Connecticut is considering a $175 million commitment to Fund V and has also been offered a seat on its LPAC board.
Vistria expects to invest between $50 million and $500 million per equity cheque across 15 to 17 portfolio companies for the fifth fund, the documents said.