Jersey-headquartered real estate investment firm ActivumSG has raised €440 million for its sixth real estate investment fund, PERE has learned.
ActivumSG Fund VI was launched earlier this year aiming to raise €650 million before the end of Q2 2020, according to two sources with knowledge of the matter. The sources told PERE that Fund VI has raised more than half of its capital from existing investors. Most of the limited partners are institutional investors, with much of the capital coming from the US.
Similar to its predecessor ActivumSG Fund V, Fund VI will target a mid-teen net internal rate of return and a 1.5x investment multiple, according to the two sources. The company will continue to look at opportunistic real estate investments, including mezzanine loans, redevelopment projects, acquisitions of hard assets and real estate operating companies in Germany and Spain. But the UK will also be added to the geographic mandate of the latest investment vehicle, according to one of the two sources.
ActivumSG declined to comment on fundraising but confirmed that Fund VI made its maiden investment with the acquisition of a development site near Madrid. With the €40 million project, the firm will build 290 loft-style rental apartments in San Sebastian de los Reyes.
Saul Goldstein, founder and managing partner of ActivumSG, told PERE that the firm has aligned its investments along the secular trends of urbanization and the ageing population. The team specializes in the residential sector and assembling business platforms of scale. It is also looking at the hotel sector in Spain where there are “severe supply-demand imbalances.”
PERE can reveal that the fund’s €489-million predecessor ActivumSG Fund V was fully deployed in May this year. In addition to the commingled fund, the firm raised around €80 million in co-investment capital, according to one source. Capital raised in Fund V was evenly invested between hard-asset acquisitions in Spain and purchases of operating platforms in Germany. ActivumSG has realized all of its Fund V mezzanine loan investments, which have generated 1.3x multiples.
According to its website, the company adopted a new strategy with Fund V where it “pivots away from conventional property purchases to focus on building up corporate platforms and other direct paths.” Goldstein explained to PERE that the company began to see more opportunities in investing in real estate operating companies compared to buying hard assets.
ActivumSG Fund III, the €380-million predecessor of Fund V, was fully liquidated this year. It generated returns above 25 percent net IRR and 2.1x multiples for its investments. In particular, Fund III’s investment in German residential developer Instone Real Estate generated a 4x multiple. The investment also marked the beginning of ActivumSG’s investments in real estate operating platforms.