Hedge fund firm Farallon Capital Management LLC is creating a new real estate fund of about $350 million to $400 million, according to a Reuters report.
Citing an insider, the report notes that San Francisco-based Farallon Capital Management LLC is targeting a 20 percent internal rate of return and will be pitching the new fund to its existing investors.
Farallon has invested in real estate before through its other funds. It partnered with Simon Property Group Inc (SPG.N) in 2007 to buy mall owner Mills Properties and sold its stake to Simon last year.
With its new fund, Farallon will target shopping centers, office buildings, warehouses and apartments that fundamentally have nothing wrong with them, but might be over-leveraged or mismanaged. It will target deals that require the Farallon fund to invest between $25 million to $50 million, the source added.
The rumored real estate fund will not invest in land or hotels, the source said.
