Madison International raises $231m for fifth fund

Madison International Realty has raised roughly one third of its equity target for its largest fund ever. According to documents from the US Securities and Exchange Commission, the New York-based real estate investment firm has raised a total of $230.8 million for Madison International Real Estate Liquidity Fund V. 

Madison is seeking to raise $750 million in equity commitments on behalf of its latest commingled vehicle. Through Fund V, the firm is looking to acquire LP and partial ownership interests in core real estate assets in the US, the UK and Western Europe. At press time, representatives from Madison could not be reached for comment.

Placement agents Mercury Capital Advisors and Forum Asset Management have been retained for the latest offering. Dow Jones is reporting that one investor in the fund is the Employees Retirement System (ERS) of Texas, which committed $80 million to the vehicle. ERS also contributed to Fund IV. 

As PERE previously reported, Madison is taking advantage of a number of trends precipitating the sale of partial interests. In some cases, property fund managers have been reluctant to sell an asset before rental rate recovery, but underlying investors in the property funds have been looking for a return of capital so they want to sell their interest. 

In addition, some fund sponsors have been selling partial interests in their core assets because they need liquidity. Banks are no longer ‘extending and pretending’ and want repayment now, forcing borrowers to sell partial interests in order to repay their lender. 

Fund V’s predecessor, Fund IV, initially targeted $400 million but ended up closing oversubscribed at $510 million in 2011. Fund IV is now fully invested. 

Madison is best-known for being part-owner of the Chrysler East Building in New York. In 2008, it bought a 38.5 percent stake for $45 million and increased its stake to 48.9 percent in 2010. In total, it has invested $55 million in the skyscraper, acquiring its ownership interest from a number of German investors that invested through Commerzbank, which held the building in a joint venture with Tishman Speyer.