Peninsula Investments Group has held a final close on its second fund, which specialises in middle-income residential development projects across Latin America.
The Miami-based real estate investment firm’s latest commingled vehicle, Peninsula Investments Group II, closed on $76 million in equity commitments from institutional investors and family offices. The value-added fund already is 50 percent committed to projects in its target markets of Brazil, Colombia, Mexico, Panama, Peru and Uruguay.
Mauricio Levitin, co-founder and managing director of Peninsula Investments, told PERE that this fund follows a similar strategy to Peninsula Investments Group I, which closed on $30 million in 2008. Fund II, however, has added Peru, Colombia and Panama to the regions it is targeting. In addition, unlike Fund I, Fund II is not investing in Argentina or Chile.
“Commitments from the first fund mostly came from family and friends. With this second fund, we were able to bring in institutional investors from the US, Europe and Latin America,” Levitin said. The minimum commitment to the vehicle was $500,000. The largest commitment came from a US institutional investor that contributed $20 million.
Through Fund II, Peninsula Investments’ strategy is to partner with local developers, typically through 50:50 joint ventures. The firm buys the land, builds ground-up developments on the land and then sells the individual units built.
“Given the growth of Latin America, there are a lot of mid-sized developers seeking capital to grow,” said Levitin. “That’s where we come in. We also bring in best practices both from other developers and other more developed markets.”
Through the fund, the firm is targeting a net return of 25 percent to investors. Fund I saw an IRR of 23 percent. The firm expects to start raising its third fund in late 2013, according to Levitin.