Legacy Closes Second Private Equity Fund with $47M in Commitments

Just over three years after having closed its first private equity fund, Legacy Capital Partners has closed its second such investment vehicle with $47 million in commitments. Modeled after the first fund, Legacy Capital Partners Fund II will focus its activities on various value-creation pursuits including acquisitions, ground-up developments and redevelopments of a variety of property types. With the goal of taking advantage of steady cash flow and achieving long-term appreciation, LCP II plans to hold properties for atypically long periods. The strategy has proven to be alluring to investors and potential development partners for both funds. LCP Fund II, which closed in mid-December of last year, hit the ground running. Its first activities included co-investments with LCP Fund I involving the Residences at Boulder Creek (pictured), a planned senior housing apartment project in Boulder, Colo., and the purchase of an office portfolio in northeast Ohio. Most recently, Legacy Capital joined forces with Chicago-based commercial real estate investment and development firm Dayton Street Partners to develop the Halsted Pershing Center in Chicago. The 104,000-square-foot spec industrial and manufacturing facility will occupy seven acres about one mile from Comiskey Park. As for LCP Fund II’s investment capacity, Legacy Capital president & co-founder David St. Pierre told CPN that “the best gauge is Fund I which, after the anticipated closing of a project late in the first quarter, will have invested in 11 projects totaling $450 million.”While many others in real estate development and lending are scaling back activities in light of currently unfavorable credit market conditions, it’s full speed ahead for Legacy Capital. “We made the decision not to sit on the sidelines,” St. Pierre said. “We certainly need to be aware of the credit crunch but we feel confident in our ability to put the money out. We’re not modifying any of our investment strategies; we’re still looking for good real estate and good things to happen with our long-term approach.” Actually, the current lending climate has proven beneficial for Legacy Capital in some ways, according to St. Pierre. “We have seen an increase in opportunities because of the credit crunch. We work with middle-market developers who were typically working with banks that would provide 90 percent of the financing but are now maxing out at 75 or 80 percent, so we have had a number of people seeking us out.”Established in the summer of 2004, Legacy Capital provides real estate developers with a reliable and efficient source of patient equity capital. Soon after its debut, the company closed its first fund with $44 million in commitments. Both funds’ investors consisted solely of high-net-worth individuals and families.