Australian property investment and funds management firm 360 Capital is targeting to raise A$370 million ($280.6 million; 262.8 million) for its first private equity real estate fund.
The 360 Capital 2017 Private Equity Real Estate (PERE) Fund will be invested in opportunistic and special situation deals across Australia.
The firm’s listed vehicle – 360 Capital Total Return Fund (TOT) – has committed A$74 million to the fund, and will own a 20 percent equity interest. This capital infusion was done so as to provide an avenue for public capital to indirectly access the PERE fund, according to a company announcement.
In an unusual move, 360 Capital is also looking to sell part of the fund management rights to all potential cornerstone limited partners. Currently, the TOT owns 25 percent at the general partner level. An additional 24.9 percent will be made available to other private equity investors, leaving 360 Capital with a 50.1 percent ownership. However, if the TOT is subject to a change of control going forward, the firm would have a pre-emptive right to acquire its 25 percent stake for nominal consideration, the firm noted in the statement.
Explaining the strategy, James Storey, fund manager, 360 Capital, told PERE: “LP’s could participate in the profits of the GP depending on the level of ownership. This would include, potential profits of any trade sale or IPO of the GP in the future. We see the stake in the GP as a means of enhancing real estate returns for investors.”
360 Capital Group was founded in 2006. Last year, majority of its real estate platform, including stakes in its listed funds, was sold to another Australian investment manager Centuria Capital Group for A$290.7 million. Following the transaction, officially completed this January, Centuria reportedly has A$2.8 billion in property funds under management.