New York-based investment firm Falcon Real Estate is to raise million (€314 million) for a predominantly Latin American called the Falcon Americas Real Estate Opportunity fund.
The strategy is to target developments with local operators, with percent of the vehicle being assigned to Brazil, 30 percent to Argentina, 20 percent to Columbia and 20 percent to the US. In the will be investing in both development sites and existing properties.
Falcon chairman Howard Hallengren said a road show starts London next month before shifting to Latin America. He said firm might also seek investors in the Middle East and East Asia holding a final close toward the end of the summer. The fund be domiciled in Luxembourg and will not be seeking capital the United States, Hallengren added. Falcon Real Estate was founded in 1991 by Hallengren and Jack Miller, both former executives Chase Manhattan Bank.
The fund is targeting about a 20 percent plus return IRR over a lifespan of five to seven years, at which point the firm may consider taking the fund public, Hallengren said.
“Except for Brazil, Latin America has been overlooked as investors have concentrated on China,” he said. “After looking at Peru, Chile and other countries, we chose Argentina and Columbia, in addition to Brazil, as the countries in which we'd like to make investments, because the growth rates of those countries looked very good.”
Though still a largely untapped region, Latin America has been attracting some dedicated vehicles lately. In early April, DLJ South American Partners closed its first fund, with a focus on Argentina, Brazil and Chile, on $300 million. In December, Tishman Speyer closed on the $600 million Tishman Speyer Brazil Fund, which will focus on acquisition and development of office, residential and mixed use properties in Brazil. In October 2007, Prudential Real Estate Investors formed a joint venture with Racional Engenharia to invest in the Brazilian industrial real estate market. And rumors have been circulating that the California Public Employees' Retirement System (CalPERS) may team up with Hines to create an $800 million fund to invest in the Brazilian property market.
Blackstone closes largest ever RE fund
The Blackstone Group officially closed its ninth real estate fund, Blackstone Real Estate Partners VI (BREP VI), with capital commitments of $10.9 billion (€7 billion). The fund will focus on global opportunities. Jonathan Gray, senior managing director and co-head of Blackstone's real estate group in New York, said in a statement the current credit crisis had created “attractive investment opportunities for this capital,” while Chad Pike, senior managing director and London-based co-head of Blackstone's real estate group, added: “With this fund we will be able to enter new markets and expand Blackstone's global investment activities.” New-York based Blackstone is also reportedly targeting $3 billion for its third European real estate fund, which is expected to close in the summer.
Kimpton to expand with $246m fund
The San Francisco-based Kimpton Group has closed its latest real estate fund Kimpton Hospitality Partners II on $246 million (€157 million). The parent company of the boutique hotel chain, Kimpton Hotels, said the fund – their third institutional outing – would acquire more than $800 million of hospitality assets over the next three years, with leverage. Kimpton will be targeting non-hotel properties in urban North American areas that could be converted to the Kimpton brand as well as acquiring existing hotel portfolios. Kimpton's second fund, Kimpton Hospitality Partners, closed in 2005 on $157 million acquiring an ownership interest in 13 properties. The group's first fund, Kimpton Development Opportunity Fund, closed in 1997 on $122 million. It bought nine properties and has since sold all but two.
Canadian farmland fund to focus on rising food demand
Calgary-based private equity firm AgCapita has launched what it bills is the only fund of its kind focused on acquiring farmland in the Canadian provinces of Alberta, Manitoba and Saskatchewan. As global prices for food and fuel continue to soar, the firm has raised C$3 million ($3 million; €1.9 million) in seed capital for the fund, with a final close expected on $10 million in May. AgCapita investment director Stephen Johnston told PERE the Farmland Investment Partnership was simply responding to “supply and demand” dynamics and focusing on Canada because of its low political risk and “world-class” infrastructure.
Canyon-Johnson closes third RE fund
The Los Angeles-based fund tied to basketball legend Magic Johnson, Canyon-Johnson Urban Fund, has closed its third vehicle on $1 billion (€638 million) saying its strategy of revitalizing urban neighborhoods across the US was a proven success. With leverage, Fund III will facilitate $4 billion of development investments, according to a statement. Managing partner Bobby Turner said the latest fund proved the success of Canyon-Johnson's strategy of investing in diverse markets.