Fundraising

Landmark takes RE secondaries lead with record raise

The firm's eighth dedicated fund in the strategy is more than double the size of its predecessor and more than $1 billion larger that the previous record-setting vehicle by Partners Group.

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Landmark Partners has hit final close on the largest fund yet raised for real estate secondaries, beating the previous record set by Partners Group.

According to a statement from the firm, the oversubscribed Landmark Real Estate Fund VIII has raised $3.3 billion, nearly double the amount raised for the previous fund in the series. Fund VIII was 42 percent committed across six transactions at the time of final close on 30 March, the statement notes.

“Our dedicated real estate team, coupled with commitments from over 150 investors globally, positions Landmark as the leader in the real estate secondary market,” said Francisco Borges, chairman and managing partner. “Landmark estimates real estate secondary transaction volume reached $6 billion in 2017, and LREF VIII’s deployment is off to a strong start.”

With Fund VIII, Landmark has smashed the previous real estate secondaries fundraising record set by Zug, Switzerland-based private markets manager, Partners Group, which closed on nearly $2 billion for Partners Group Real Estate Secondary 2013 in 2014.

Fund VIII launched in the second half of 2016 with a $2 billion target, according to PERE data. It surpassed this target in December, collecting at least $2.4 billion after around 14 months in the market.

Investors in the fund include Arkansas Teacher Retirement System, which committed $25 million, Connecticut Retirement Plans and Trust Funds, which committed $65 million, and New York State Common Retirement Fund, which raised $150 million.

Landmark is targeting a 14-16 percent net internal rate of return for Fund VIII, sister title Secondaries Investor reported. It has a 1 percent management fee, 8 percent preferred return and 12 percent carried interest.

The fund’s predecessor, Landmark Real Estate Fund VII, closed on $1.6 billion in April 2015, according to PERE data, after around 14 months in market. That fund was generating a net internal rate of return of 36.7 percent and a net investment multiple of 1.2x as of September 2016, according to a June 2017 fund presentation, the most recent publicly available data.

According to a half-year report from advisor Greenhill Cogent, $4 billion-worth of real estate secondaries traded in the first six months of 2017, equivalent to the volume for all of 2016.