Franklin Templeton closes latest FoF

The New York-based real estate, infrastructure and real resources investment platform of Franklin Templeton Investments has amassed a total of $319.2 million in commitments for its third global multi-manager fund, which was the first of its funds to target US institutions.

Franklin Templeton Real Asset Advisors has held a final close for its Franklin Templeton Private Real Estate Fund, raising $319.2 million in commitments and exceeding its target size of $300 million. The vehicle is the platform’s third global fund of funds, but it is the first commingled fund available to US institutional investors.

The fund held a first close on $70 million in commitments from two investors in September 2010 and had raised a total of $259.2 million from 12 investors as of October 2011, according to filings with the US Securities and Exchange Commission. Limited partners included US and European institutions, such as the State Universities Retirement System of Illinois, which selected the fund for a $50 million mandate in February.

Last June, PERE reported that the Franklin Templeton Private Real Estate Fund would invest in between 12 and 15 underlying funds, with approximately one-third of the funds targeting each of the major regions – the US, Europe and Asia. The vehicle is expected to generate typical value-added returns of about 15 percent.

Franklin Templeton began investing on behalf of the fund in February 2011 and now has committed nearly half of the capital in the vehicle. The platform, which has focused on niche co-investments, has executed such deals in Europe and actively is reviewing opportunities in Asia and the Americas. To date, about one-third of the fund's investments have been committed to co-investment transactions.

“We continue to witness a shortage of capital in existing real estate transactions, which is creating very attractive investment opportunities for today’s investors,” said Marc Weidner, managing director for Franklin Templeton Real Asset Advisors and the fund’s portfolio manager, in a statement. “The distress is coming from the asset’s ownership, rather than the asset itself, signalling the opportunity to exploit this inefficiency.”

Franklin Templeton Investments Real Asset Advisors is the real estate, infrastructure and real resources investment platform of San Mateo, California-based global investment manager Franklin Templeton Investments.