GTIS Partners has closed its second Brazilian opportunistic real estate fund, GTIS Brazil Real Estate Fund II, according to the New York-based real estate investment firm. The fund closed on $810.2 million in commitments late last month, well above its original target of $500 million, making it the largest commingled opportunistic real estate vehicle focused on Brazil.
Although the firm declined to disclose which investors committed to the fund, a statement from GTIS revealed that several investors from its first dedicated Brazil offering, GTIS Brazil Real Estate Fund I, returned to participate in the follow-on vehicle. In addition, more than half of the capital committed to Brazil Fund II —$468.2 million—came from pension funds. Other investors included global insurance firms, fund of funds managers, sovereign wealth funds, foundations, family offices and high-net-worth individuals. PERE understands that GTIS did not hire a placement agent, rather it raised the funds itself.
Through Brazil Fund II, GTIS is looking to develop and redevelop Brazilian properties, focusing on office, industrial and residential assets. The firm will develop properties directly as well as through joint ventures with local operating partners, targeting returns of 25 percent to 27 percent.
“Brazil’s economy remains on solid ground despite renewed global concerns, real estate remains undersupplied and there are relatively few private equity real estate managers with substantial development experience in that market,” said Tom Shapiro, president and founder of GTIS. “We currently have 14 million square feet either built or under development in Brazil, including 8,000 for-sale apartments, 2.5 million square feet of office space and 3 million square feet of warehouse space across Sao Paulo and Rio de Janeiro.”
Joao Teixeira, senior managing director and head of GTIS’ São Paulo office, said: “In 2011, GTIS invested in eight office, residential and industrial projects totalling almost R$550 million ($325 million) in equity commitments.” Of that amount, approximately $250 million was invested on behalf of Brazil Fund II.
GTIS has raised a total of approximately $2.3 billion in equity since its inception in 2005, including $510 million for Brazil Fund I in 2009. To date, the firm has committed roughly $1 billion to investments in Brazil.