Spain-focused Kronos expands to Portugal with latest fund – Exclusive

Kronos, which opened an operating office in Portugal in October, is aiming to invest 20% of its new opportunistic fund in the country.

Kronos Investment Group, a Madrid-headquartered real estate manager and developer, has raised €100 million in the first close of its third opportunistic vehicle.

PERE has learned that four new investors and three existing investors from the firm’s prior funds have invested in the first close of the Kronos Real Estate Fund III. This includes six family offices and one Swiss pension fund. Kronos has set a €200 million capital raising target and a €250 million hard-cap for the commingled fund.

With Fund III, Kronos is expanding its investment focus to Portugal, with around 20 percent of the fund’s equity earmarked for investments in the country.

The previous two funds in the opportunistic series, which invest in residential development projects, have been focused on investing within Spain.

Saïd Hejal, a founding partner of Kronos, told PERE that a recovering economy and abundance of residential demand with little supply has created investment opportunities in Portugal.

“The country has some of the same metrics as Spain, and there are few developers left in the aftermath of the crisis. Besides, there are entry barriers given that the banks have become very selective with land financing,” he said.

Hejal added none of the major European firms are active in Portugal yet. It is only a few family offices and some listed developers from Spain, in his view, that are now starting to look at the market.

Last October, the firm also opened an office in Portugal, which now employs five people.

The firm has made two investments totalling €60 million from Fund III. Meanwhile, Fund II, which closed on its €200 million hard-cap last September, is currently generating fully diluted returns of 24 percent at a 2x multiple.

Kronos Investment Group was founded in 2014 by the former Fortress Investment Group director Hejal and Bertrand Perrodo, chairman of the family office BNF Capital. The firm has 52 employees across Madrid and other operating offices.