Cypress Capital Group is launching a new opportunistic residential fund focused on US single-family rental and multifamily housing.
Cypress Capital Partners 2022 is targeting $100m and expects an initial $20m in the first six months.
Similar to its predecessor strategies – Cypress Capital Partners 2014, 2017 and 2019 – the new fund will be investing in major US tech-centred cities, namely New York and Silicon Valley.
Speaking to REFI, Cypress managing partner Wen Shiau said the new fund will be more geographically varied as it considers other tech-oriented locations such as Austin.
“We will continue to invest in New York and Silicon Valley, but we also want to expand to other cities as our capabilities increase, while staying within our lanes of single-family and multifamily residential,” said Shiau.
“I know that our next move is [to enter] Austin,” he continued, adding that the team wants to develop its expertise there, which will involve looking for external service providers. This could include developers, operators, brokers and tech firms.
Shiau explained that real estate in such tech-centred areas is what’s particularly appealing due to their associated risk- reward.
The fund will target 20% to 30% IRR with drawdowns around 2.5% cap rate. It will employ an opportunistic approach, and for Cypress Capital Group, this means that they can be flexible in their capital structuring.
The firm has derived from a family office. Its AuM stands at $52m, with total asset value of $78m. The family office still acts as an anchor investor of its funds, with up to 50% AuM of their earlier funds.
Shiau began his career on Wall Street and had a 20-year stint in Asia. He started in 1992, working for firms such as Credit Suisse, Lehman Brothers and Greenwich Capital.
He now works from New York alongside his team Joseph Luik, Jay Chen, Lev Schechter and Pui Wong. The advisory team includes Samuel Milbank and Michael Yuen.