Portfolio Advisors has closed its fourth global real estate fund of funds. According to the Darien, Connecticut-based fund of funds manager, Portfolio Advisors Real Estate Fund (PAREF) IV closed with $400 million in commitments.
Launched in July 2009, the fund of funds focuses on the value-added space, seeking funds focusing on the office, residential, retail, hotel and assisted-living sectors, as well as self-storage and industrial warehouses to a lesser degree. Kenneth Wisdom, head of Portfolio Advisors’ real estate group, told PERE that PAREF IV seeks investment opportunities globally, with an emphasis on the US, Western and Central Europe and certain markets in Asia.
“This is an opportune time to invest in value-added real estate funds and secondary acquisitions,” Widsom added. PAREF IV, which is targeting a net return of 14 percent, has been making commitments to funds and purchasing direct secondary interests since its initial closing in 2009.
With the latest fund of funds, each LP was able to customize its commitment by selecting desired sector allocations and proportions of real estate exposure from among four strategy options: globally diversified real estate, US real estate only, non-US real estate only and real estate secondaries only. While all the options will include up to 20 percent for opportunistic secondary market purchases, the secondaries option will consist solely of secondary purchases.
More than 80 percent of the total commitments came from investors who previously had invested in Portfolio Advisors-sponsored vehicles. LPs in the fund include private and public pension plans, private endowments and foundations, family offices and high-net-worth individuals. Although the firm raised the majority of the funds directly, Fortress Group served as a placement agent to help raise some of the capital, according to Wisdom.
Portfolio Advisors’ previous global real estate fund of funds, PAREF III, closed in 2008 with $147 million in commitments. Just as they could with IV, LPs were able to customize their commitments in PAREF III.