Kennedy Wilson has sold up to $100 million of convertible preferred stock to Toronto-based investment firm Fairfax Financial Holdings as Fairfax eyes deals in the commercial real estate asset class. The stock purchase agreement comes just six months after Kennedy Wilson was taken over by David Minella’s special purpose acquisition company (SPAC) Prospect Acquisition Corp.
“This is the single greatest event in Kennedy Wilson’s history thus far,” said chairman and chief executive officer William McMorrow about the Fairfax deal in a statement. “Not only does Fairfax bring an extremely strong balance sheet and investing track record but, more importantly, our companies share the same long-term, value investing philosophies.”
A spokesperson for Kennedy Wilson said there would be no changes in management as a result of the investment.
“We believe that this is the right time for Fairfax to begin selectively participating in commercial real estate opportunities, particularly in California,” said Fairfax chief executive officer Prem Watsa in a statement. Fairfax has a total investment portfolio of approximately $20 billion.
Kennedy Wilson, which has purchased over $600 million of real estate notes and assets since December 2009, last week announced an equity joint venture with PCCP to acquire a large apartment complex in Alameda, California. The venture, the third between the two firms, purchased an all-equity interest in Summer House Apartments for $86 million, involving the restructuring of a three-year bridge loan with Bank of America.
Kennedy Wilson has five active value-added and opportunistic discretionary funds and more than 10 separate accounts targeting the US, Hawaii and Japan.