Landmark Partners, the Simsbury, Connecticut-based private equity and real estate secondaries firm, has closed its latest real estate secondaries fund on $1.6 billion.
Landmark Real Estate Fund VII was oversubscribed and exceeded its initial $1 billion target. The firm will use capital from the fund to continue its secondaries strategy of acquiring interests in existing funds and partnerships invested in underlying real estate globally.
Landmark has already committed $552 million across 11 transactions from LREF VII capital. Last month, Landmark upped its stake in the Europa Capital’s Europa Fund III, the London-based real estate fund manager’s third pan-European fund from Southern Methodist University’s $1 billion endowment.
“The demand for LREF VII demonstrates the growing interest and strong appetite for real estate secondaries investments from investors,” commented Francisco Borges, chairman and managing partner, Landmark.
“Landmark Partners estimates real estate secondary market transaction volumes reached $4.8 billion in 2014, which constitutes the sixth consecutive year of record transaction volume.”
In total, the 2014 aggregate global volume comprised 92 transactions compared to 57 in 2013 equating to increases of approximately 30 percent and 60 percent respectively. GP-led “liquidity solutions” accounted for 27 percent of the total volume. This was the result of an increased number of GPs exploring ways to wind down or recapitalize mature funds, according to the firm. The geographical distribution of assets sold revealed that US and European focused funds constitute approximately 47 percent and 38 percent, respectively, of total volume, while Asian real estate partnerships amounted to 11 percent.
And as the real estate secondaries market grows, more firms are targeting the sector. Currently Madison International Realty is on the fundraising trail targeting $950 million for its sixth real estate secondaries fund, while Morgan Stanley AIP, the multi-manager arm of the New York-based investment bank, closed its latest real estate secondaries fund on just north of $500m in February.
Last October Zug, Switzerland-based private markets manager, Partners Group, raised the biggest real estate secondaries fund of them all when it collected $2 billion.