Zug, Switzerland-based private markets manager, Partners Group, has closed on nearly $2bn for investment in real estate secondary LP stakes, it announced today.
The firm said it had raised $1.95 billion for the vehicle, its second, dedicated global real estate secondaries fund. In so doing, it almost doubled its prior capital raising target. According to PERE’s coverage of Partners’ fundraising activities last October, the firm had aimed to raise $1 billion for the vehicle, which is called Partners Group Real Estate Secondary 2013.
It also means the firm has beaten its own fundraising record for the strategy set in 2010, when it raised $1.5 billion for its Partners Group Real Estate Secondary 2009 fund.
The haul further evidences the increasing appetite from institutions in backing real estate secondaries investment strategies. Toronto-based advisory firm Setter Capital said earlier this year that 14 percent of all secondaries transactions in 2013 – equivalent to $5.3 billion – related to real estate.
Partners said in its announcement that the market for buying limited partnership interests was potentially far larger and that it had screened more than $100 billion of real estate secondaries, choosing to transact “very selectively” in $2.7 billion of that total to date.
The fundraising dwarfs all others in the still nascent real estate secondaries marketplace, but other firms also are courting attention from investors. Landmark Partners, arguably Partners’ closest rival in real estate secondaries, is currently raising a vehicle with a target of $1 billion. It had raised $670 million as of last month.
In addition, the marketplace has seen new entrants recently. In July, for instance, global asset manager Aberdeen Asset Management announced its debut real estate secondaries fund was also oversubscribed and closed at its hard cap of €300 million. One month before that, StepStone, another global private markets firm, acquired Clairvue Capital Partners, a secondaries real estate business in the US, in an effort to better establish its presence in the marketplace.
Partners’ latest fundraise should see it meaningfully increase the $8 billion-plus of real estate assets it currently has under management. Indeed, the firm said in its announcement that the new vehicle had already invested in “several” property portfolios.
Marc Weiss, partner and global head, private real estate secondaries, stated: “The demand for this program highlights intense interest from institutional investors across the world for access to this real estate investment strategy. We are the market leader in the field of real estate secondaries and we believe this growing investment area is now coming of age, as underscored by the closing of our 2013 program.”
Claude Angéloz, partner and global co-head private real estate, said: “Our secondary real estate programs bring liquidity to a traditionally illiquid market, broaden the source of returns available to investors and enable institutional investors to enjoy greater flexibility in their overall real estate investment strategies.”