Paladin Realty closes $200m Latin America fund

The Los Angeles-based firm has raised its second vehicle targeting Latin America with a primary focus on residential projects in Mexico, Brazil and Chile.

Paladin Realty Partners has held a final close on $200 million (€156 million) for its second private equity real estate vehicle targeting Latin America.

Paladin Realty Latin America Investors II raised the capital from a number of US pension funds and other institutional investors, including the Overseas Private Investment Corp. and International Finance Corp. The majority of the fund will be invested in residential projects, with at least half targeting the affordable housing sector. Primary emphasis will be placed on Mexico, Brazil and Chile, though Paladin may invest across Latin America.

One of the firm’s most notable investments in the region was the development of the Estrella del Mar Golf and Beach Resort in Mazatlan, Mexico. Still under construction, the project will have 1,145 homes and 631 condos when completed.

In a statement, Paladin cited a number of positive factors in Latin America that are driving economic growth and therefore residential demand, including demographic shifts, strong commodity prices, political and economic reforms and prudent fiscal policies.

Paladin’s efforts in Latin America come as many other private equity and real estate investors are eyeing the region. Equity International, the private equity real estate firm affiliated with Sam Zell, is focusing on Brazil and Chile; the firm has invested in a Sao Paolo-based homebuilder as well as a Santiago-based retail developer. GIC, the investment arm of the government of Singapore, and US developer Hines are also active in Brazil and Mexico.

Founded in 1995 in partnership with former US Treasury Secretary William Simon, Paladin Realty is headquartered in Los Angeles, with affiliated offices in Morristown, San Francisco, Chile, Brazil and Argentina. In 2005, management of the firm, including president James Worms, bought out Simon’s interest in the company.

Paladin Realty has acquired more than $2 billion of real estate across sectors in both the US and Latin America. The firm is also the sponsor of an unlisted REIT, Paladin Realty Income Properties, which was launched in 2003.