Slate holds first close on Canadian opportunistic fund – Exclusive

The Toronto-based firm has a $300m target for its debut Canadian opportunistic real estate vehicle.

Slate Asset Management has held a first close on its Canadian private equity real estate fund, PERE has learned.

The Toronto-based firm declined to comment, but PERE understands that the firm has corralled $100 million of capital for Slate Canadian Real Estate Opportunity Fund, which it launched in November with a $300 million target.

The fund’s investor base comprises Canadian pension funds and family endowments, and the firm is understood to be marketing to US investors as well. Slate also invested $15 million in the fund, keeping with its strategy of investing its own capital in teach fund. The firm can fundraise until early 2018 but expects to hold a final close earlier this year.

Slate is targeting a high teens net return for the vehicle and plans to deploy capital throughout Canada in asset repositioning and portfolio acquisitions. The firm is also looking at cyclical investment opportunities, such as in Calgary. The oil-dependent city’s real estate has been hit by lower oil prices in recent years, with many investors looking to offload property. Slate recently closed on 12 Calgary office assets at what was said to be about a 50 percent discount to replacement cost, PERE understands.

Starting in 2011, the firm assembled a 65-property portfolio in large secondary markets – such as Charlotte, North Carolina and Jacksonville, Florida – through a series of private funds with Canadian investors, PERE previously reported. The firm ultimately listed those investment vehicles on the Toronto Stock Exchange as Slate Retail REIT, a Canadian real estate investment trust, which it continues to manage.

In October, the firm made its first overseas purchase, buying 67 predominantly grocery-anchored retail properties throughout Germany for more than €100 million, PERE previously reported. Capital for the acquisition came from Slate European Real Estate Limited Partnership I, a value-added fund created specifically for the first European purchase. Slate raised capital from a Canadian investor base that was 30 percent institutions and a mix of high-net-worth individuals and family endowments.

Slate has about $4 billion of assets under management.