In its first offering since 2007, New York-based private equity real estate manager The Praedium Group has launched the Praedium VIII Multifamily Value Fund, targeting $600 million in equity. The value-added vehicle held an initial close in September on $55 million in US commitments, alongside another $25 million committed to the fund by a non-US investor, according to the firm’s SEC filing.
Fund VIII is a follow-up vehicle to Praedium Fund VII, which closed on $900 million in commitments in 2007, and likely will target the same investor base, including public and corporate pensions, financial institutions, insurance companies, endowments and foundations. Investors in Praedium’s previous offering included the Ohio State University endowment, which committed $10 million, and the Public Employees Retirement Association of New Mexico, which committed $20 million.
Praedium will continue a similar investment strategy with Fund VIII, focusing on assets that have been impaired by prior mismanagement, inadequate capitalization, economic dislocation and other market inefficiencies then renovating and repositioning those properties. The firm specializes in acquiring middle-market assets, generally those between $10 million and $75 million.
Fund VII has amassed a portfolio of 132 assets across 23 states with a cost basis of approximately $2.2 billion. Recently, Praedium began divesting the fund’s assets, including the Aventine at Naples apartment complex in Naples, Florida. A joint venture between Praedium and Greystar Real Estate Partners sold the property to Continental Partners for $44.25 million in August. The partnership had acquired the 350-unit multifamily property for $22 million in 2010.
Since its inception in 1991, Praedium has completed 350 transactions representing $9.3 billion of capital.