Inside Dune’s $960M Fundraising

Raising a new real estate fund is never easy. But the reasons a fundraising is tough can vary from fund to fund, says Cia Buckley Marakovits, partner and chief investment officer at Dune Real Estate Partners.  Buckley Marakovits recently helped Dune, a New York-based firm with more than $3.6B in distressed, value-add, and contrarian real estate investments in the United States, raise its third fund. Fund III closed with $960M in commitments, topping the targeted $850M. This fundraising took slightly longer than Fund II, says Buckley Marakovits, despite the second fund being raised in the depths of the financial crisis. In raising Fund II, the difficulty was getting meetings with investors who were trying to manage their portfolios amid economic chaos. Raising a fund at the top of the market is equally difficult because investors are busy looking for the next big idea, rather than targeting more established managers, Buckley Marakovits says. This time around, the biggest challenge was investors’ higher due diligence standards, she says.

“[There] were a lot more meetings with the same investors,” she says, noting that a lot more investors were using operational consultants during their due diligence phase. 

Buckley Marakovits says the process has become so drawn out that fund managers may start raising capital earlier in order to hit their closing deadlines. However, the increased interaction with LPs and their consultants has proven educational, she says, with each party learning more about the others’ processes and industry best practices.

The fund’s investors were from the U.S. and abroad, she says, and included public and private pension funds  (Illinois SURS, Oklahoma Teachers, and Illinois Municipal Retirement Fund have announced their commitments to the fund), foundations, endowments, and significant high-net-worth investors. Buckley Marakovits says investors responded to their offering for a number of reasons—mostly due to the firm’s longevity in the market and the opportunities that it was able to help investors access.

Dune’s Fund III has already committed $263.5M to eight assets, including a residential portfolio in Las Vegas, retail space in Los Angeles, and luxury residential property in Miami.

Raising a new fund is never easy. But the reasons a fundraising is tough can vary from fund to fund, says Cia Buckley Marakovits, partner and chief investment officer at Dune Real Estate Partners.

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