Blueprint: Hines’ major European raise, Iconiq’s minority stake in Madison, Patrizia CIO departs

Hines nears €1 billion with latest European fund, Iconiq backs Madison with minority stake, Patrizia's CIO moves on, and more in today's briefing, exclusively for our valued subscribers.

What’s new?

Third time’s the charm
After propelling itself into the top 30 of our latest PERE 100 listHines continues to add to its five-year fundraising total. The Houston-based manager raised €900 million in the first close for its European Value Fund 3 after launching the vehicle in February with a €1.5 billion target. All of Fund 3’s commitments so far have come from European investors, with the expectation that US, Asian and Middle Eastern investors will commit during the remainder of this year and into 2023, according to a release. The firm has now raised more than €2 billion in the region, with additional capital raised from its core and recently launched core-plus funds: Hines European Core Fund and Hines European Property Partners.

Iconiq investment
San Francisco-based Iconiq Investment Management last week acquired a stake in Madison Realty Capital, as reported by affiliate Real Estate Capital USA (log in or registration required), a move that will allow the New York debt manager to expand its product offerings, lending platform and investment team. The firms formed a relationship during the pandemic, with Iconiq investing in a number of Madison’s funds, a source told PERE. The latter firm just had its biggest year yet, with $6.4 billion of new transactions. One of the drivers behind the deal is believed to be growing investor interest in US debt strategies, with the once niche asset class filling a bigger bucket within institutional portfolios.

Speedy return to market
Chicago-based Cresset Partners is on a fundraising tear despite increased market volatility. The development-focused manager has closed on its second opportunity zone fund and a first-time logistics vehicle while simultaneously launching the next iteration of each. The firm has amassed $655 million for Cresset Diversified Qualified Opportunity Zone Fund II and $250 million for Cresset Real Estate Logistics Fund I. Both funds are fully deployed, Dominic DeRose, director of investments, told PERE, hence the speed getting back to market. For the OZ funds, Cresset sizes its fundraises to its investment pipeline and has not set a target for Fund III as of yet. The logistics fund will target around $400 million for its second raise, DeRose added.

Trending topics

Singapore swing
London-headquartered Round Hill Capital is expanding its investor coverage in Asia with the hire of a regional head of capital markets. Jihoon Yim, former director and portfolio manager of global real estate at Hanwha Asset Management, will join the firm’s Singapore office. The move marks yet more firms placing key roles in Singapore over Hong Kong as Asia reacts to the varying restrictions still in place from the pandemic. In his new role, Yim will lead fundraising efforts, developing investment opportunities and relationships across the Asian markets to support the firm’s European residential strategy. Yim’s appointment, along with the hire of former Corestate Capital Group capital raiser Rajit Dass earlier this year, are part of the firm’s broader push to increase its fundraising capabilities globally.

More eyes on IOS
Industrial outdoor storage properties continue to attract attention from institutional capital. Miami-based firms Iconic Equities and Leste Group have formed a value-added joint venture to acquire $400 million of assets in the niche property type. The move follows other ventures, like JPMorgan’s $700 million partnership with Zenith IOS, and fundraising efforts like Alterra’s over $500 million fund in March. “Attractive supply and demand fundamentals driven by businesses investing to improve their logistics operations as the economy recovers from and has been reshaped by covid makes this the right time to invest in IOS,” Timothy Bishop, founder and chief executive officer of Iconic Equities, said in a release. The partnership has been seeded by a $9.5 million acquisition of a five-acre site in Coral Springs, Florida.

Data snapshot

Logistics enters a new era
US industrial real estate demand from e-commerce appears ready to taper off and normalize after two unprecedented years of growth, according to research from Green Street Advisors. Whether other demand drivers will replace that of e-commerce remains in question.

People move

Kavanagh finds a new home
Patrizia’s chief investment officer is moving on after a five-year stint at the Augsburg, Germany-based real assets manager. Anne Kavanagh [her LinkedIn profile here] is assuming the chief executive post at Telford Homes, one of London’s largest residential developers and part of Dallas-based commercial real estate developer Trammel Crow Company. She will take over from former CEO Jon Di-Stefano beginning on July 25. As Patrizia CIO, Kavanagh was one of only a handful of women in a C-suite role at a PERE 100 firm. Patrizia, meanwhile, has planned for Kavanagh’s responsibilities to be assumed by three of the firm’s real estate leaders: Amal del Monaco [her LinkedIn here], CEO of asset management and development of European real estate; Mahdi Mokrane [his LinkedIn here], global head of investment strategy and research; and Philipp Schaper [his LinkedIn here], CEO of European real estate.

Investor watch

School’s out
Texas Permanent School Fund is losing a long-tenured senior portfolio manager. Ali Houshmand [his LinkedIn here] announced in a LinkedIn post that he is moving to EQT Exeter, the real estate arm of Swedish private equity firm EQT, to become global head of non-traded real estate investment trusts. Houshmand worked for Texas Permanent for over seven and a half years, helping shape its now $3.7 billion real estate portfolio. Recent investments overseen by Houshmand include a $75 million commitment to TPG‘s Real Estate Partners IV Fund in April and a $60 million commitment to Warburg Pincus’s Asia Real Estate Fund last year.

This week’s investor meetings
Wednesday, June 8

Thursday, June 9

Friday, June 10

Today’s letter was prepared by Peter Benson, with Evelyn LeeChristie Ou and Samantha Rowan contributing