Kinea Investimentos has completed fundraising for its Brazil-focused real estate development fund, Kinea II Real Estate Equity Fundo de Investimento Imobilário, capturing R$197 million (€79 million, $96 million) in commitments from 429 local investors. The São Paulo-based alternative investment management firm initially had targeted R$135 million from investors, but it ultimately collected R$182 million, the majority of which came from high-net-worth individuals with about 5 percent from institutional investors. Kinea’s parent company, financial conglomerate Itaú Unibanco, also committed R$15 million in seed capital to the fund. Similar to its predecessor fund, Kinea I Real Estate Equity Fundo de Investimentos em Participações, Kinea II will pursue residential projects in Brazilian cities with populations exceeding 500,000, such as São Paulo, Rio de Janeiro, Curitiba, Belo Horizonte, as well as office developments in São Paulo. However, with its new fund, the firm will focus on larger office properties of 5,000 to 10,000 square metres (53,820 square feet to 107,639 square feet), rather than smaller properties of around 3,500 square metres that the firm had developed with Kinea I. Kinea plans to partner with local developers around Brazil for the projects and currently has four developments in the pipeline totalling R$70 million, or approximately one-third of the fund’s capital. “We’re looking for companies focusing on residential real estate, with a long track record in that city and that would like to have a fund as a partner,” said Carlos Martins, founding partner and portfolio manager of real estate at Kinea. Kinea II is structured as a Fundo de Investimento Imobilário (FII), or a real estate investment fund, unlike Kinea I, which was structured as a Fundo de Investimentos em Participações (FIP), or a private equity fund. At the time Kinea I was launched, the FII structure was used only to acquire performing real estate assets rather than to develop properties. Investors in an FII, however, are not subject to a 15 percent capital gains tax, as opposed to those in an FIP. Kinea I completed its first round of fundraising in April 2008, collecting R$50 million in commitments, followed by an additional R$96 million in September 2009. Meanwhile, in February, Kinea completed the latest round of fundraising for its Brazil-focused real estate rental income fund, Kinea Renda Imobiliária FII. The firm raised R$410 million in the third issuance of the fund, exceeding its target of R$300 million. That fund now has brought in a total of R$970 million in equity from investors, which consist primarily of high-net-worth individuals and family offices. Kinea expects to hold a fourth capital raise, targeting around R$400 million, by the end of the year.
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