Swiss alternative asset management firm, Partners Group, has raised €275 million ($400 million) for its Partners Group Global Real Estate 2008 fund as it seeks to buy from “distressed sellers” and “growth opportunities in emerging markets”.
Claude Angéloz, partner and co-head of private real estate at the firm, said in a statement: “We currently see a rapidly increasing number of compelling investment propositions in various markets around the globe. These include opportunities from distressed sellers arising from the market turmoil in developed markets and growth opportunities in emerging markets, where positive GDP growth, low levels of household debt and powerful demographic trends continue to be significant drivers of demand for real estate space.”
In particular, Partners Group regards secondary market transactions as attractive “due to the scarcity of capital” and has already completed the purchase of eight assets in China – including a shopping mall – on behalf of the vehicle.
The firm said most of the assets were cash generating and were subject to a quick sale as the vendor required immediate liquidity enabling Partners Group to buy them at a 50 percent discount to the firm’s fair market valuation estimation. Partners Group expects the investment to yield a 2x equity, an IRR of more than 20 percent and a cash-on-cash yield of more than 15 percent a year during the holding period.
Including the China transaction, the fund has already invested close to 40 percent of its overall capital commitments.
Investors in the vehicle include corporate and public pension plans as well as insurance companies, family offices and endowments from around the world.
(additional reporting by Robin Marriott)