Penn Square FoFs invests in $5.5bn Brookfield consortium

The Radnor, Pennsylvania-based firm has closed its second fund of funds on $145m. With consultant Townsend acting as investment adviser, the fund has committed capital to Brookfield’s mega pledge fund.

Penn Square Real Estate Group has closed its second fund of funds on $145 million – and already committed to some of the largest commingled vehicles around, including Brookfield Asset Management’s $5.5 billion turnaround consortium.

The Radnor, Pennsylvania-based private equity real estate firm closed Penn Square Global Real Estate Fund II at the end of March and has already committed $10 million to the Brookfield Real Estate Turnaround Consortium, as well as to three other funds, including Fortress’ $800 million Japan Opportunity Fund and Brockton Capital’s second vehicle.

Cleveland-based consultant The Townsend Group acts as Penn Square’s investment advisor, and –
speaking in the May issue of PERE magazine – managing partner Jonathan Albro said the fund had been able to access deals and opportunities normally reserved for the largest institutional investors precisely because of that relationship.

“It has proved a powerful relationship,” he said, adding the firm was able to secure the same terms as the largest investors in the consortium, including a 12 percent preferred return and a deferred fee on each acquisition payable when the consortium capital is returned.

“Brookfield’s turnaround consortium is a vehicle normally open to only the top two percent of global investors and would not have been open to smaller investors such as a fund of funds without that relationship with Townsend,” Albro said.

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