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GI Partners Raises $1.45B For Fund Targeting Data Centers, Life Sciences

Yet another private equity firm has demonstrated both the seemingly endless supply of dry powder in the capital markets and the insatiable demand for data centers and life sciences properties.

3701 Market St., a lab building on the main life sciences corridor in Philadelphia's University City.

GI Partners closed the initial fundraising round for GI Real Estate Essential Tech + Science Fund, an open-ended fund targeting data centers, life sciences properties and research and development facilities of all stripes, the company announced Tuesday. The investment vehicle, also known as the ETS Fund, raised $1.45B in total, which GI said exceeded its hard cap for the fund.

The fund's investors come from across the spectrum of institutional capital, from public and private pension funds to investment banks, GI said in its announcement. Private equity investors from the U.S., Canada and Europe also bought into the ETS Fund, GI's first that targets more than one asset class.

Since launching last year, the ETS Fund has already acquired eight properties in the most sought-after life sciences markets in the country: Boston, the North Carolina Research Triangle, Philadelphia and the San Francisco Bay Area, where GI Partners is based. It purchased 3701 Market St. in Philadelphia, a 131K SF building on the city's main life sciences corridor, in June for $79M, or $567 per SF.

The unifying principle behind the ETS Fund's investment strategy is real estate that is essential to its user's daily functions, and/or operational on a 24/7 basis, the announcement read. The building at 3701 Market exemplifies the strategy, with the University of Pennsylvania leasing the majority for medical offices and Drexel University leasing the rest for wet lab space.

As an open-ended fund, ETS is expected to generate both return from eventual asset sales and income from property operations, GI Managing Director John Sheputis said in a statement provided with the announcement. Sheputis also serves as head of the ETS Fund.