Students at the Kelley School of Business raised $4.2 million for a real estate private equity fund to allow for future investments in properties across the country.
The fund is called Sample Gates Management LLC and is managed by 16 students, according to Will Huber, president of the real estate private equity program that runs the fund. Huber said the fund gives students the experience to invest and transact in a professional environment and see how a real estate private equity company would operate a business. Last semester, Sample Gates Management LLC raised $4.2 million through alumni investments. He said that fundraising ended at the end of 2022, and they are now in the investment period.
“The idea is to apply all of that capital into real world deals, so we’ve been sourcing a lot of opportunities through our alumni network and Kelley’s other relationships,” Huber said.
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Huber said the real estate private equity program is the capstone of the Kelley School of Business real estate program and spots within the group are reserved for seniors. He said this school year there are 16 students involved with the fund, as well as Thomas Peck, finance professor for Kelley School of Business and faculty advisor to the fund. Huber said juniors who applied in the fall and were selected over winter break to be a part of the fund in the 2023-2024 school year are currently going through a transition process to prepare to take over the fund in the coming months.
“The real purpose of the fund is to give students the kind of professional experience they may not see in this field until three to four years after college,” Huber said. “Something I truly think is special about the program is the alumni engagement. They are our investors, consultants and mentors who we get to talk shop with on a weekly basis, and that engagement is really the backbone of the program.”
Huber said the members of the fund are currently looking at multi-family apartment communities to invest in. He said many of these communities need leasing or renovations. Students are also looking at investing in warehouses, industrial buildings and hospitality groups, such as hotels and resorts in Indiana, California, Texas, Vermont and Virginia. They are looking at four deals right now, including one in Bloomington, according to Huber.
“It’s a lot, but it’s what we do,” Huber said. “We receive the deals and do a screening to see if it fits the framework of the fund, and if we feel good about it, we continue pursuing the deal.”
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Peck said the real estate programs at Kelley have grown a lot in the past couple years and have given the students involved many opportunities for experience in the field. Peck said this has allowed more opportunities for alumni and student interactions.
“The Real Estate Club, which gives Kelley students opportunities to network with professionals working in the real estate industry, has grown to 672 students when three semesters ago we had less than 300,” Peck said.
Peck said the students in the fund made presentations to investors at the beginning of this year.
“Now we’re going to make good on our deals with the investors and we are going to achieve good returns for these people who have entrusted their money to us,” Peck said.
