Madison International closes $1.4bn fund

The New York-based private equity real estate firm has raised its largest fund to date, far exceeding the vehicle’s original target.

Madison International Realty has held a final close on Madison International Real Estate Liquidity Fund VI, collecting a total of $1.39 billion, including capital from sidecar vehicles, co-investments and general partner commitments.

The New York-based private equity real estate firm officially launched the fund in March 2015 with a $950 million equity goal, according to a filing with the US Securities and Exchange Commission.

Limited partners in Fund VI included endowments, foundations, public and private pension funds, sovereign wealth funds, family offices, insurance companies and high-net-worth individuals from Europe, Asia, the Middle East and Australia, as well as the US.

Among the US investors were the Illinois State Board of Investment, which committed $50 million in January, and the Teachers’ Retirement System of the State of Illinois, which earmarked $100 million in February, according to documents from the institutions. West Virginia Investment Management Board also was an investor in the fund, according to the pension plan’s website.

“The success of the Fund VI capital raise demonstrates the confidence investors have placed in Madison’s highly differentiated direct secondary investment strategy, which targets ownership stakes in prime commercial properties and portfolios in capital cities of the US, UK and Western Europe,” said Ronald Dickerman, Madison’s founder and president, in a statement. “Our strategy is proven to produce asymmetric returns in numerous economic cycles, with minimal volatility. We believe our strategy is counter-cyclical during periods of economic uncertainty.”

Madison has deployed approximately $400 million of Fund VI’s capital to date. Fund investments included the acquisition of a $150 million interest in Hudson’s Bay Company Property Vehicle in November; the purchase of a 35.4 percent stake in St. Stephen’s Green Shopping Centre, Dublin, for $66 million in December; and the acquisition of a $103.7 million ownership stake in 550 Kearny Street, an office building in San Francisco in March.

Forum Capital and Mercury Capital Advisors acted as placement agents for the fund, according to the SEC filing.

With approximately $3.5 billion of assets under management, Madison provides joint venture and preferred equity capital to real estate owners and investors that are looking to de-lever their properties, identify an exit strategy, or sell a portion of their ownership position. Madison invests only in secondary transactions involving existing properties and portfolios in the US, UK and Western Europe. The firm has offices in New York, London and Frankfurt, Germany.