Fund Goal

To provide a superior rate of return, while limiting risk, through extensive diversification in real estate.

Who Can Invest

Sedgwick Real Estate Portfolio I (REP I) is closed to new investors.

Who Might Want to Invest

An investor who:

• • Wants to diversify a conservative portfolio by investing a portion of his or her money beyond the public securities markets and into real estate.
  • Wants the potential for superior long-term returns and is willing to assume a higher level of risk.
  • Can accept the inherent illiquidity.

Sedgwick’s first real estate investment closed in 2006. Most investors in Abbott and Portfolio Advisors are participating in this fund as well, thereby maintaining their allocation to alternative investments. This real estate portfolio has really resonated with the family – overall commitments are $7,050,000.

Here’s what’s in the portfolio:

TA Associates VIII

This well-known real estate firm was founded in 1982 and is based in Boston. We are participating in their eighth fund, about $900 million in size. TA follows a “value-added” strategy meaning they buy existing properties that are performing below expectations, fix them, and collect the income stream. TA also buys properties for capital appreciation. Interestingly, TA buys the first 50% of its real estate properties using a line of credit and then starts calling the capital committed by its investors.

TA’s portfolio is broadly diversified across many property types and geographic areas. The portfolio consists of small to medium sized investments across the U.S, approximately 46% suburban office buildings, 34% industrial properties, 17% multi-family residential properties and 3% retail.

Harrison Street I

Sponsored by members of the Galvin family (founders of Motorola), this firm is a component of the Galvin family office. (Just like Sedgwick, the Galvins named their fund for the street on which the original family business was located.) While this is Harrison Street’s first fund, the real estate professionals running the fund have extensive experience, and their approach to business is very focused. Harrison Street specifically targets these areas: student and senior housing, medical offices, marinas and self-storage facilities, all in partnership with experienced local developers. With carefully selected locations, current demographic trends should ensure continued high demand for these projects. This “opportunistic” approach is a nice complement to the more traditional approach used by TA Associates.

Both of these funds are now in the liquidation phase of their life cycle. Like everything else, both of these funds were affected by the real estate downturn beginning in 2008. We expect this investment to break even or perhaps do a little better.