Blue Vista Capital Management has received $150 million from Canadian private investment firm Fairfax Financial Holdings, the companies said Tuesday.
The deal came as Toronto-based Fairfax announced it had purchased outright one of Blue Vista’s existing investors, Allied World Assurance, for an undisclosed amount. Allied World Financial Services, a subsidiary of the company, bought a minority stake in Blue Vista in October 2014 in its first real estate deal, according to an announcement at the time. The original investment also saw Blue Vista receive $225 million of AWFS’s capital to invest in middle market co-investments and student housing.
“As part of Fairfax’s acquisition of Allied World they conducted due diligence on Blue Vista and, after evaluating our investment results and operations, they made the decision to acquire Allied’s interests in Blue Vista and to increase their commercial real estate exposure via direct investments in our funds,” a Blue Vista spokeswoman told PERE. “The $150 million is intended to be invested in Blue Vista’s new products in 2018 and 2019.”
Before AWFS’s 2014 investment, Blue Vista had invested in transactions valued at $5.5 billion. To date, its total capitalization is about $7.5 billion.
As of June 30, Blue Vista had fully realized one value-added fund, Blue Vista Sponsor Equity Fund I, a 2004-vintage that generated a 29.2 percent gross internal rate of return and a 1.5x multiple. Fund II, a 2006-vintage, and Fund III, a 2012-vintage, are in the process of liquidating. Fund II had a 15.5 percent gross IRR and 1.4x multiple as of June 30, while Fund III generated a 24.1 percent gross IRR and 1.7x multiple.
Blue Vista closed its fourth fund in 2016 on $445 million, exceeding its $400 million target, PERE previously reported; that vehicle has not yet generated realized returns. The firm also closed its student housing fund last year on $241 million.
Fairfax is no stranger to the real estate market. In 2010, the firm formed a US debt and equity partnership with public real estate company Kennedy Wilson. The joint venture was funded with $278 million, 90 percent of which came from Fairfax, according to a statement at the time. The firms expanded their partnership in 2012, with Fairfax providing €250 million for a European property JV. Fairfax had invested $692 million in total with Kennedy Wilson as of December 31, according to Fairfax’s most recent annual report.
Fairfax also bet on Greek real estate in 2013 by purchasing $244 million of stock in Eurobank Properties, according to reports at the time. The company rebranded to Grivalia Properties in 2014, and Fairfax owned 40.6 percent of the company, worth $332 million as of December 31, its financial report said.