Patron Capital, the Europe-focused private equity real estate firm led by Keith Breslauer, has committed up to €400 million to a joint venture targeting distressed real estate in Spain.
The London-based firm, which currently is investing out of its fourth opportunity fund, Patron Fund IV, has formed the joint venture with Meridia Capital, a private equity business led by Javier Faus, one of Breslauer’s long-term investment partners. Meridia’s capital is expected to come from the Meridia Iberian Real Estate Fund, which it has launched expressly for investing in Spain via the joint venture. It could account for as much €150 million of equity.
The venture can invest across asset classes, however Breslauer told PERE it would likely invest in residential properties, seen widely as the most distressed asset class in the country currently. He said: “It seems to be the largest single element of distress is residential. Therefore, the natural assumption is we will look at residential. The actual answer will probably be a mixed-bag, there might be offices and hotels in there. But, intuitively, residential seems to be the biggest sector.”
Patron Fund IV was raised in 2012 and closed on €880 million, of which, currently, approximately 55 percent has been invested. It has since attracted further co-investment capital bringing its total capital to €1.1 billion. While Spain has long been on the firm’s radar, Beslauer admitted it had transacted little in the country. “We’ve tried to do quite a bit,” he said, adding that Patron has “15 or so live opportunities” currently. He added that the firm has been targeting deals of a lot size of between €60 million and €120 million.
The news of Patron’s Spanish joint venture comes as the firm acquired a €228 million loan book from NAMA, the Irish government-owned asset management agency. The book comprises six loans against retail assets in Ireland and Poland.