LaSalle Investment Management has raised $320 million for a new global indirect investment fund aimed at small and mid-sized institutional investors, PERE has learned.
The Chicago-based firm secured seed investments from four investors in the UK and Europe, as well as a $25 million co-investment commitment from its parent company JLL for the LaSalle Global Navigator Fund. The open-end vehicle will function largely as a fund of funds but with the ability to participate in joint ventures, co-investments and listed securities acquisitions.
“This is meant to serve middle-size and smaller pension plans that can benefit from a one-stop shop to invest in real estate globally,” said Ed Casal, chief executive of LaSalle Global Partner Solutions, the firm’s indirect investment arm. “The very biggest clients that invest with LaSalle and others do their own allocations, choosing regions and sectors. In most cases, smaller AUM investors don’t have the buying power, scale or teams to do that work and we can do it for them, so it’s a cost-effective way to invest in real estate.”
Targeting both the public and private sides of the debt and equity space, the Global Navigator Fund is the first fund to be launched by LaSalle GPS since the firm’s 2018 acquisition of London-based Aviva Investors’ Real Estate Multi-Manager team. Previously, the firm only managed separate accounts for indirect strategies.
All four initial investors had previous relationships with LaSalle, Casal said. The first commitment came toward the end of the first quarter, in the nascent stages of covid-19’s outbreak in Europe. The other three closed during the pandemic, though initial contact was made before travel restrictions began.
The Global Navigator Fund is domiciled in Luxembourg. Early fundraising efforts were focused on Europe, where there is generally more interest in global strategies. However, Casal said his group will look to appeal to investors – primarily pension funds – in North America and Asia-Pacific too. He expects it to be particularly appealing to institutions from countries with limited domestic real estate markets, such as Canada and Japan.
The fund will target core-plus returns from investments in developed markets. In terms of sectors, Global Navigator Fund will have little to no exposure to widely distressed property types such as retail and hospitality, but its strategy will include niche assets. The vehicle’s capital has already been deployed in funds targeting US medical office and UK student housing, as well as two diversified vehicles, one in the US, the other in Europe.
“With the pandemic disruption impacting most real estate assets globally, we can take advantage of pricing opportunities in a way that other investment structures may not,” said Catriona Allen, the senior fund manager for the platform. “Having teams and networks on the ground around the world gives us early access to these opportunities, and our ability to act nimbly in these situations is important.”
The GPS platform manages $8 billion, most of which is invested in or alongside other fund managers and operators.