Sparinvest brings third FoF to €243m, backs InfraRed

Copenhagen real estate funds of funds manager is backed further by Danish institutions and PERE learns it has made an investment in the second China fund of InraRed Capital Partners

Sparinvest Property Investors, the real estate funds of funds platform from Copenhagen, has added a further €90 million of commitments from three domestic investors for its third global real estate fund of funds, Sparinvest Property Fund (SPF) III.

The firm, which is 70 percent owned by Danish asset manager Sparinvest Group, attracted additional equity from PKA, which represents occupational pension schemes mainly for employees in the Danish public social and health sectors, it said in an announcement, among other investors.

PKA’s commitment brings the total raised by Sparinvest for the fund of funds to €243 million. The firm held a third closing for the vehicle in June after attracting commitments from other Danish investors Laerernes Pension, the pension fund for Danish teachers and AP Pension. Other investors include PenSam, another Danish pension fund and the family office Kirk Kcapital, which represents the family behind Lego toys.

PERE previously reported the firm was seeking €500 million in total for the fund however, in the announcement it said the target was lower at €400 million.

Sparinvest, which has built up a platform today managing approximately €900 million of capital since its formation in 2005, is believed to have performed well. It is understood that predecessor fund, SPFII generated a net return to investors of 14.6 percent in the last financial year and is generating a return of 13.1 percent since it was launched four years ago.

The firm’s strategy for SPFIII is to invest its capital into underlying funds and investments worldwide, but with a special emphasis on North and South America and Asia, and to a lesser degree, Europe. Sparinvest revealed it had already committed to four investments: two in the US, one in the UK and, latterly in China.

PERE understands the investment in China takes the form of a commitment to the second China opportunity fund of InfraRed Capital Partners and Chinese textiles giant Nan Fung. Sparinvest’s commitment follows InfraRed’s first closing of $200 million held in June. InfraRed, which is the result of a management spin-out from HSBC bank in 2011, is aiming to raise $500 million in total for the fund.

Sparinvest did not name the firm in China it has backed but managing partner Bo Jensen commented in the announcement: “Even though the growth in China has slightly slowed recently, we believe that the future growth opportunities in that part of the world remain attractive. We have chosen a manager in China, who has experienced positive results through the renovation of existing, well-situated commercial real estate assets and who is also involved, to a lesser degree, in the development of residential properties. It is crucial for us to be invested through a locally-based manager with the right contacts and ease of access to attractive investments.”