Hammes Partners, a Milwaukee-based investment management firm focused on the U.S. health care real estate market, announced the closing of its third institutional private equity fund with $739 million in capital commitments.
The fund, called Hammes Partners IV, reached its hard cap within seven months. The goal of the fund was originally $725 million but the company saw interest from investors that exceeded that hard cap. The money raised will be used by the company to invest in acquisition and development opportunities in U.S. health care real estate.
This is the company’s third institutional private equity fund. Patrick Hammes,managing principal of Hammes Partners, said such a fund is unique to this area as other institutional private equity funds are typically headquartered on the coasts or Chicago.
“To do this in Milwaukee has been really rewarding. We started this institutional private equity fund platform just over 10 years ago. When you think about how much we’ve been able to raise from institutional investors in Milwaukee, I think it’s a great accomplishment for a team and I think it’s great for the city,” Hammes said.
The company’s past two institutional private equity funds raised $440 million and $687 million of equity respectively. Investors in the latest fund include foundations, pension funds, insurance companies, family offices, investment and wealth managers, and fund of funds.
“I think that reflects on the fact that we’re in an attractive industry,” Hammes said. “We’re in health care, which continues to grow as a percent of our economy. Within health care, we’re in a vertical of it called outpatient facilities that is continually growing.”
Hammes Partners is a national organization, but Hammes said the company would be interested in helping local health care providers with this latest round of funding.
“We would certainly like to support any of the local health care providers with their ambulatory outpatient needs. We’ll certainly be working to have those discussions,” Hammes said.
Hammes Partners IV is a fully discretionary pool of capital, which allows company leadership to immediately invest the funds as needed when an acquisition or development opportunity arrives. Hammes said this allows them to move quickly and remain nimble while always having capital to invest.
Despite the COVID-19 pandemic changing the landscape of the health care world, Hammes said the health care real estate segment (particularly outpatient venues) is expected to continue its growth. There was a time during the height of the pandemic when some health care providers needed to focus more on operations as opposed to facilities, but the need for new facilities has once again rebounded.
“We think that given the need for providing care in a more convenient, cost-effective setting, that trend will continue despite COVID. We’re seeing health care providers across the U.S. continue to build new ambulatory outpatient facilities. The long-term trends for our sector remain intact,” Hammes said.