Kronos Investment Group, a real estate fund manager and developer with headquarters in London, Madrid and Luxembourg has held an €85 million first close for its second opportunistic vehicle.
The firm, founded in 2014 by former Fortress Investment Group director Saïd Hejal and Bertrand Perrodo, chairman of the family office BNF Capital, is targeting €150 million for the fund and has so far garnered the first close capital from five family offices.
The firm's debut fund was launched in 2014 and closed on €100 million.
As with its predecessor fund, Kronos is targeting net internal rate of returns of 20 percent-plus and the strategy for the fund is to buy residential land in Spain. The firm will then either develop the land, or build landbanks to sell to future developers once development financing in Spain comes back to a healthy level, said Hejal.
“Given where we are in the cycle, the strategy focuses on buying residential land in key markets like Madrid, Barcelona and Costa del Sol where the new stock supply has dried out. To give you an idea at the peak in 2007 there were in excess of 4000 developers in Spain and now there are about 350 active players, so there is a very big gap in the market” Hejal told PERE. “Sales are picking up in Spain, demand is there. Last year residential prices went up by 5 percent and 2016 is on track to be as robust as last year.”
Kronos has been purchasing the land mainly from the balance sheets of Spanish banks, and about 40 percent of its investments so far have come from Spanish 'bad bank' SAREB.
The firm has already closed two deals using capital from the new fund and has two more under exclusivity which Hejal expects should close by end of September which will mean the fund will be close to 40 percent deployed.