Noble Capital, an Austin-based private lending firm, is launching a $250 million Texas real estate fund that will consider Dallas a top investment market. The company is partnering with a private investment bank based in San Francisco, US Capital Partners, to create the Signature Fund, an investment vehicle open to individuals and family offices. US Capital is the real estate fund’s general partner and Noble Capital is the fund manager, taking care of asset management, underwriting, and day-to-day decisions.
Chris Ragland, COO of Noble Capital, said that funds will be available across the state of Texas but that Dallas is a top market because of the increased demand for housing with the area’s uptick in population. Ragland also noted Dallas-Fort Worth’s diversified economy as a factor in its consideration as an investment target.
The fund is aimed at small business owners that are doing “fix and flips,” or small construction in the residential space. The fund is not for commercial or land use, Ragland said, but it will be in the business of looking at distressed properties and improving neighborhoods.
When the fund was announced, it had about $3 million in capital. “We have already earmarked and called upon the first $25 million, which is mostly in motion from our existing high-net-worth clients,” Ragland said in an email to D CEO. “Leading up to that $25 million milestone, we will engage with other high net-worths, family offices, [Registered Investment Advisors], and institutional investors within our networks to invest in the fund.”
Loans made will be used for the acquisition and renovation of properties and will be short-term, usually between six and 18 months, depending on the project. Those interested in receiving capital would apply through Streamline Funding, a subsidiary of Noble Capital. Ragland said Noble Capital’s typical loan has averaged around $400,000 since 2015, a trend that he expects to continue. He added that once the fund is at capacity, it should be invested in more than 600 assets.
“Today we originate loans and fund them through our Private Lender Network, a collection of high-net-worth individuals who individually participate in the loan opportunities presented to them by Noble Capital,” Ragland said by email. “This program, while very successful, has a number of inefficiencies that will go away as we move towards a fund model.”
The fund’s $250 million target was reached after completing market research on what size fund was appropriate for the Texas marketplace, Ragland said, and what growth will look like here over the next few years.