American South Fund Management (ASFM), a joint venture between SDS Capital Group and Vintage Realty, has successfully closed on its American South Real Estate Fund II with $174 million in equity commitments, nearly three times the size of its debut impact fund ASREF I.
ASFM, through the ASREF I and II funds, provides preferred equity and equity financing for real estate sponsors with projects located in 10 Southern states, Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas.
The ASREF I and II funds have, to date, collectively committed $106 million to 22 projects, financing 5,147 housing units, 81% of them affordable to families at less than 80% of the area median income. ASFM is also an outlier in the real estate industry, as a majority woman-owned real estate fund manager.
While the investors in ASREF II are predominantly financial institutions, a $50 million investment from funds managed by GCM Grosvenor represents the first public pension capital to be committed to ASFM’s funds.
Funds managed by emerging managers are by definition smaller, often less than $500 million. This scale creates a challenge relative to securing capital from most public pension funds as the vast amount of capital they must deploy can require the size of individual pension fund investments to be substantially larger than what most emerging managers can absorb within a single fund.
GCM Grosvenor has been managing emerging manager capital in real estate since 2010, and currently manages more than $5 billion of real estate emerging manager programs. GCM invested in ASREF II from funds managed on behalf of five public pension plan investors.
