Acadia Realty Trust Closes Fund with Mega-Buying Power

The firm's fifth institutional retail fund closed with $520 million in commitments.
Kenneth Bernstein, Acadia

Kenneth Bernstein, Acadia

New YorkAcadia Realty Trust has just announced the final closing of its Acadia Strategic Opportunity Fund V LLC institutional fund, with commitments totaling $520 million—a sum that translates to $1.5 billion for investment in opportunistic and value-add retail assets.

Fund V is following Acadia’s tried-and-true investment strategy of focusing on well-located street retail, next-generation street retail and distressed-retailer real estate. The equity REIT now has “new dry powder available to invest in compelling risk-reward opportunities over the next few years,” Kenneth Bernstein, president & CEO of Acadia, said in a prepared statement.

Acadia, which committed $104.5 million to Fund V, didn’t precisely have to hunt down investors, and the proof is in the numbers. Fund V was oversubscribed, surpassing its half-billion target by $20 million, and it closed within 30 days of its launch. History had more than a little to do with the expeditious wrap up. Acadia’s impressive track record with its four preceding retail-focused opportunity funds provided encouragement for existing investors in one or more of those vehicles to contribute to the fifth fund in the series. Accounting for a whopping 98 percent of Fund V’s third-party commitments, the long list of repeat offenders encompasses university endowments, foundations, pension funds, investment management firms and family offices.

Acadia’s closing of Fund V comes four years after the final close of Fund IV, which also received capital commitments exceeding its goal. Fund V will adhere to the same investment guidelines as its predecessor, and throwing money at every opportunity that comes along isn’t part of the plan. “We had definitely been disciplined and for very good reasons…so, it would be crazy to lose that discipline and just spend the money,” Bernstein said during Acadia’s second quarter conference call on June 27. “But for those folks who take the point of view, well it’s about assets under management—it’s about AUM, use that money or lose it—I think that’s contrary to our overall philosophy. And what I have found is when people take the approach of use it or lose it, it too often turns into use it and lose it, which doesn’t work for any of us.”

Acting through a subsidiary, Acadia will serve as Fund V’s managing member, and with its own commitment of capital, the REIT has a 20 percent interest in the fund.

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