Conundrum targets $200m with follow-on fund

The Toronto-based fund manager is expected to launch its third residential vehicle this summer, targeting multifamily investments in key Canadian cities.

Conundrum Capital is planning to launch its third residential fund this summer targeting equity commitments of $200 million, PERE has learnt.

Conundrum Residential Property Income Fund III is a value-added vehicle targeting net IRRs of between 13 percent and 15 percent, people familiar with the situation said. The Toronto-based real estate fund manager declined to comment.

The firm raised $77 million and $142.5 million respectively for CRPIF I and II. According to Conundrum’s website, the firm returned 1.3x for Fund I, launched in 2004, with an IRR of 10.5 percent. Fund II, formed in 2006, is 63 percent invested having acquired 11 properties.

Fund III will have a 10-year life, including a five to seven-year investment period. Sources said multifamily assets in Canada were generally trading at half their replacement costs.