Revetas Capital, the private equity real estate firm focused on Central and Eastern European markets, has brought in co-investment partners including Goldman Sachs to buy developer TriGranit.
PERE reported last month that the firm, led by founder and managing partner Eric Assimakopoulos, was leading a club of investors in the acquisition of the Budapest-based developer from private equity giant TPG Real Estate. Terms of the transaction were not disclosed, but the deal is understood to be valued at approximately €300 million, PERE reported.
The deal marks the last capital commitment for London-based Revetas’s second fund and the first for Revetas Capital Fund III. The latest fund has raised approximately €60 million from existing investors against a target of €350 million. The predecessor fund, Revetas Capital Fund II, is currently projecting gross IRRs of 24 percent and an equity multiple of 2.1x, PERE understands.
Revetas has investors which have made fund and co-investment commitments in both funds. Goldman Sachs, which could not be reached for comment, invested through its vintage funds, which focus on the secondaries market for private equity, according to Revetas’s announcement.
Goldman’s latest secondaries vehicle, Vintage Fund VII, beat its $5 billion target to close on $7.12 billion, according to data from sister publication Private Equity International. The firm also has a 2015-vintage $568 million fund named Vintage Real Estate Secondary Strategy, and had a “tactical tilt” to real estate in its 2012-vintage Vintage VI Fund “due to supply/demand imbalance and recovering real estate fundamentals,” according to an investment document for its Vintage VII fund obtained by sister publication Secondaries Investor.
“What is interesting here is some of the biggest institutional investors are getting access to the region through us,” Assimakopoulos said, adding Revetas had previously invested alongside groups including New York-based firms Cerberus Capital Management.
Assimakopoulos noted that having major private equity players diligence Revetas’s deals adds “a level of comfort” to the deal-making process.
“It aligns our capital base because they’re an investor,” he said. “We work hand-in-hand with professionals who have a tremendous amount of experience. We believe these partnerships are very strong because of the ability to leverage that experience to, at the end of the day, deliver better returns for everyone.”
The TriGranit deal sees Revetas inheriting a pipeline of assets under management and development with a gross completed value of €450 million. The assets include offices and retail properties in cities including Budapest, Krakow, Katowice and Bratislava.
Revetas is also taking on a development capability with a long track record to add to its value-add and opportunistic investment and asset management strategies. Since its formation in 1995, TriGranit has developed nearly 50 properties across seven Central and Eastern European countries. The properties comprise approximately 17 million square feet with an aggregate value of around €2.5 billion.
Going forward, Revetas expects to have about 10-15 percent of its funds’ capital allocated to development.
“The combination of investing in key university cities that have both strong fundamentals based on the outsourcing sector and strong tourism gives us multiple opportunities across various asset classes,” Assimakopoulos said.