CBRE GI closes latest Europe fund at €1bn – Exclusive

The Los Angeles-based real asset investment manager’s new fundraise is part of a total $3.5bn raised for its value-add platform globally over the past two years.

CBRE Global Investors has held a final close on €1 billion for Europe Value Partners 2, the second vehicle in its value-add fund series targeting the region.

The Los Angeles-based real asset investment manager launched the vehicle during the spring of 2017 and held an initial close on $100 million in June, according to a filing with the Securities and Exchange Commission.

The fund attracted commitments from institutional investors from Europe, North America, Asia and the Middle East. Among its limited partners is the Teacher Retirement System of Texas, which committed €89.7 million, according to PERE data. Approximately 20 percent of the capital came from re-ups from existing investors.

CBRE GI has already deployed €200 million of EVP2’s equity in three deals in the high-street retail and logistics sectors, with a fourth transaction due to close imminently. While the fund’s predecessor, which raised a total of €840 million in 2016, was evenly split between the retail and logistics sectors, EVP2 will have a larger exposure to logistics, Charles Baigler, fund manager for the EVP series, told PERE.

“We’re looking at how we play that retail market now,” he said. “The shopping center world is starting to look oversold…We see it not as much as a buying opportunity as something to watch.”

“To date, EVP2’s investments have targeted the countries of Spain, Denmark and France. “But there’s no reason we won’t look at Germany or Italy, it’s entirely opportunity-driven,” Baigler said. “We don’t have specific targets for each country. If we find opportunities, particularly large opportunities, there’s nothing to stop us from investing in that market.”

At the moment, CBRE GI is not actively pursuing investments in the UK – one of the main target markets of EVP1. “The UK market is on a wait-and-see basis for us,” Baigler said. “The UK could be a very interesting buying opportunity in Q3, Q4 of next year. Assuming a Brexit decision has been made by then, it will become quite clear what will happen in the UK and you can work out how to invest in the market.”

Another key difference between the two EVP funds is that EVP1 adopted an allocator investment model, while EVP2 will represent a hybrid of direct investment deals along with transactions sourced by third parties. The firm’s greater direct focus with EVP2 follows the restructuring of CBRE GI’s European team, which Jeremy Plummer became head of in 2016. Plummer was previously the chief investment officer of CBRE Global Investment Partners – the firm’s multimanager business that had been increasingly pursuing direct investments.

“We’re now in the position to use our in-house capabilities to generate deals, rather than rely solely on third parties,” Baigler said.

Through its value-add platform, CBRE GI has raised a total of $3.5 billion over the last two years, including $1.34 billion from Strategic Partners US Value 8 in 2016 and CBRE Asia Value Partners IV, also in 2016, according to PERE data.

CBRE GI had $101.7 billion of assets under management as of June 30.