South Street Partners Announces Final Closing of Oversubscribed Inaugural Discretionary Fund
Charlotte, NC and Charleston, SC – July 27, 2022 – South Street Partners(“South Street”) a leading private equity real estate investment firm headquartered out of Charlotte, NC and Charleston, SC, announced the final close of SSP GP Fund I(the “Fund”) yesterday. The firm’s inaugural discretionary commingled fund raised over $225 million, significantly exceeding an original target of $100 million. The Fund was formed to continue South Street’s established track record of executing on opportunistic, value added and special situation investment opportunities in real estate assets located in the Southeastern United States as well as select U.S. and international markets.
The Fund’s GP structure enables South Street to scale its successful 13-year strategy of partnering with institutional investment firms on large cap transactions as well as to pursue small and mid-cap deals utilizing the Fund’s balance sheet. In addition, the firm expects to generate co-investment opportunities for its limited partners. The Fund could provide South Street with as much as $2.25 billion of unlevered buying power via these partnerships and co-investment vehicles.
The Fund can invest across the entire spectrum of real estate asset classes but will be primarily focused on upscale and luxury resort and residential opportunities including its first two investments:
- Palmetto Bluff – a ~20,000-acre private residential club and resort community located in Bluffton, SC just north of Savannah, GA featuring 32 miles of river frontage, a 5-star 200-key Montage Hotel, the Palmetto Bluff Club and May River Golf Club, Palmetto Bluff Realty and entitled land for approximately 2,500 additional residences.
- Kiawah Partners – a portfolio of real estate and operating assets including much of the remaining residential land on Kiawah Island, a 10,000-acre resort community off the coast of Charleston, SC featuring 10-miles of beachfront, the world class Kiawah Island Club, Kiawah Island Real Estate, the island’s dominant residential brokerage, and Two Meeting Street Inn, a 130-year-old bed-and-breakfast located South of Broad in Charleston, SC.
The Fund secured commitments from a broad range of high-quality limited partners including family offices, Registered Investment Advisors, wealth management firms, funds of funds and high-net-worth investors through an oversubscribed fundraising process.
“As a former fund-less sponsor raising capital on a deal-by-deal basis, reaching the closing of our inaugural U.S. discretionary commingled fund is a major achievement,” said Chris Randolph, Partner. “Raising this fund through the pandemic certainly created challenges but we are honored by the outsized investor demand the fund received, which we believe is not only related to compelling opportunities that we are seeing but also the reputation and track record we’ve built over the past 13 years.”
The Fund will seek to generate attractive risk-adjusted returns for its limited partners by:
- Sourcing unique acquisition opportunities through a deep network of owners, advisors, managers, and developers of real estate created over decades of operational and investment experience
- Acquiring properties at attractive prices (often below replacement cost), usually as a result of distress or underperformance at the asset level, improper capitalization, or unique management or ownership dynamics which limit a seller’s ability to effectively bring the asset to market
- Instituting and managing a repositioning or redevelopment program
- Adding value through hands-on asset management through in house operational expertise
“The current environment and demographic trends in our markets of focus create significant opportunities for the Fund’s investment strategy,” said Patrick Melton, Co-Founder and Managing Partner of South Street. “We believe our history of sourcing and executing a wide range of complicated transactions throughout various stages of the market cycle while providing excellent returns to our investors over the last decade is one of the main reasons investor appetite was so strong.”
Todd Whitenack, Co-Managing Partner of BBR Partners, whose firm’s clients anchored the Fund, stated, “Our firm was delighted to be part of this raise and we believe the strong interest from our clients is related to South Street’s track record, unique value proposition as well as the relevance of the strategy in the post Covid world.”
Since its founding in 2009, South Street has established itself as one of the country’s preeminent private residential club and resort investors. The firm has executed on some of the industry’s most recognizable trades over the last decade, including North Beach Towers, Kiawah Partners, Doonbeg, Christophe Harbour, The Cliffs Communities, The Residences at Salamander and Palmetto Bluff.
About South Street Partners South Street Partners is a private equity real estate investment firm headquartered in Charlotte, NC, and Charleston, SC and the largest owner of private residential club and resort communities in the Southeast – including Kiawah Island Club and Kiawah Island Real Estate, Palmetto Bluff, The Cliffs, and the Residences at Salamander. Founded in 2009, South Street has deployed over $500 million of equity across resort, residential and commercial properties and has over $1.3 billion of assets under management. South Street acts as a principal investment platform as well as an operating partner and co-investor for institutional partners interested in special situations, opportunistic and value add real estate investments in the Southeastern United States as well as select continental US and international markets.