Sydney-based LIDIS targets $400m for Australia fund

LIDIS, the Sydney-based real estate investment firm, is to kick off fundraising on its sixth private equity real estate fund, aiming to corral $400 million for investments in Sydney and Brisbane.

LIDIS, an Australian private equity real estate firm is poised to bring its sixth opportunity fund to the market, targeting $400 million (€275 million; $388 million) in equity capital.

The firm is expected to hit the fundraising trail tomorrow for the LIDIS Real Estate VI fund which will invest across the real estate sectors in and around Australian cities Sydney and Brisbane.

LIDIS aims to generate returns of 20 percent IRR from the six-year fund for an investor pool consisting of both private investors such as high net worth individuals and family offices as well as institutional investors, the latter which will be approached for investment for the first time.

The firm typically raises its capital through a vehicle in which it matches the commitments of its limited partners. For this vehcile, LIDIS aims to raise $200 million from investors which it intends to match with its own capital. To date, it has raised $275 million across its five previous real estate investment funds, returning a total IRR of 35 percent and an equity multiple of 2.2 times.

The firm had held back from fundraising since its last closing in 2003 amid worsening market conditions, however executive chairman and chief investment officer Dennis Lidis told PERE he regarded value to be returning to the domestic market.

He explained: “The commercial real estate sector in Australia is still fairly depressed and will continue to be so because of the deleveraging that is taking place. I expect that to continue over the next six to 12 months. Landlords have had to sell and that is creating a lot of pain in the market.”

As a result, he said such assets were often priced lower than their intrinsic value. The fund is expected to make between five and ten investments of between $5 million and $50 million.