Ohio Bureau of Workers Compensation Fund (Ohio BWC) is committing $50m (鈧�47.5m) to Hammes Partners III, a fund that specialises in medical offices.
Hammes is seeking to raise up to $700m for the fund, which will invest in medical office buildings and ambulatory care centres in the US.
Lee Damsel, director of investments for the Ohio BWC, said during a board meeting: 鈥淭he impressive off-market deal flow from the manager鈥檚 broad network of medical relationships was the most impressive factor.
He added: 鈥淗ammes Partners spends a lot of time dealing with corporate suites of major hospitals and these contacts provide insight into future deals and developments.鈥�
Jon Hammes, founder of the company, said: 鈥淢uch of the sourcing for the fund will be done off-market and avoiding sales of properties by real estate investment trusts.
鈥淲orking on off-market deals allows for capital rate compression as there will not be five or 10 firms bidding on the same asset.鈥�
Hammes is targeted returns in the mid teens for Partners III, three-quarters of which is intended to come from income.
Hammes will be investing in existing assets and development projects. It will limit developments and renovation at 35% and will avoid speculative development projects. Any development must be 50% leased before a new project is started.
The fund manager has deployed 92% of the capital for its $438m Partners II fund, with 80% in acquisitions and 20% for development.
There is $25m left to invest through one to three transactions.
