Southern Bridge targets $150m for second fund

The Cayman Islands-based firm has launched a residential housing fund, with hopes of closing the vehicle by the end of the year. Half the fund is expected to invest in Peru and Colombia. The firm's last fund closed on $42m last year.

Southern Bridge Capital has launched a $150 million private equity real estate vehicle targeting affordable housing in Latin America.

The firm, based in Grand Cayman on the Cayman Islands, said it hoped to close the vehicle by the end of 2009.

The fund, SBC Latin America Housing Fund, will target affordable and middle income housing in Central America, the Caribbean and the Andean Region, including Peru and Colombia. It will also look to provide mezzanine financing as well as equity investments to developers in those regions.

David Goldfield, Southern Bridge managing partner, told PERE demand for affordable housing in the region was “huge”, and even with billions of dollars of investment “the basic housing needs of these countries still wouldn't be met”. Southern Bridge is expecting to target roughly half the fund to affordable and middle income housing (between $10,000 and $80,000) in Peru and Colombia.

BAP Capital is another private equity real estate firm that is targeting the Caribbean and Latin American region. The Miami-based firm is targeting $175 million for its debut institutional fund, the Caribbean and Latin American (CLA) Real Estate Fund. The CLA fund will focus on for-sale housing from affordable properties to luxury resorts and distressed assets. The fund’s primary target will be the Dominican Republic, Puerto Rico, Antigua and Barbuda.

Goldfield said the fund had commitments “in principle” from two Europen development financial institutions, entities which channel funds to particular firms, industries and sectors. Goldfield, who previously worked as regional director of Canadian export credit agency Export Development Canada covering the Latin America region, said there was also interest from institutional investors in Europe and North America.

Southern Bridge’s predecessor fund, Central American & Caribbean Real Estate Fund I, closed last year with $42 million of commitments, the firm said. The fund has made 10 investments in areas such Panama, the Dominican Republic and El Salvador.