TPG Real Estate has wrapped up fundraising for its first commingled real estate fund, TPG Real Estate Partners (TREP) II. The fund, which was launched in early 2014, attracted more than $2 billion of equity, slightly above its original target of $2 billion.
Investors in TREP II included public pension plans such as the New Jersey Division of Investment, which committed $125 million, and the Texas Municipal Retirement System, which pledged $100 million, private pension funds, sovereign wealth funds, insurance companies, and other institutional investors.
TPG RE II’s investment strategy is to target niche property sectors where it can build platforms and achieve scale; investments in out-of-favor sectors; distressed assets and corporate platforms; mismanaged real estate-focused operating companies; and special situations that can benefit from a change in executive leadership, according to documents from NJDOI.
One early investment for the fund was that of TriGranite, one of Central Europe’s largest private developers and managers of retail and office properties, in August. While financial terms for the deal were not disclosed, it was reported that, as part of the deal, TPG has acquired more than €500 million of assets across Poland and Slovakia.
“We are proud to have reached this milestone and are appreciative of the continued support from our global investor partners,” said Kelvin Davis, founder and co-head of TPG Real Estate, in a statement. “Our success attracting support from new and existing investors is reflective of our talented team of professionals, our proven track record, and the distinctive nature of our investment strategy. Building on our growth over the past six years, we are looking forward to investing the fund successfully.”
“TREP II will continue to implement our differentiated investment strategy focused on real estate platforms and property-rich companies that leverages our broader capabilities to optimize property performance and enhance platform capabilities,” said Avi Banyasz, partner at TPG and co-head of TPG Real Estate.
TPG began making a push into real estate in 2009 via its buyout funds. In 2011, the firm hired Westbrook Partners managing principal Avi Banyasz to help build up its real estate team, as well as Morgan Stanley’s Robert Weaver, who led fundraising efforts for TPG RE II. Weaver left the firm in July for a non-real estate-related opportunity.
TPG Real Estate comprises both TPG Real Estate Partners (TREP), the equity investment platform, and TPG Real Estate Finance Trust, a debt origination and acquisition platform that it launched earlier this year. With approximately 35 investment professionals based in TPG’s New York, San Francisco, and London offices, the two platforms manage a total of more than $6 billion in assets.
To date, TPG’s real estate equity business has deployed more than $3 billion of equity in both residential properties and approximately 1,100 commercial real estate assets in North America and Europe. Investments have included Catellus Development Corporation, Enlivant, Evergreen Industrial Properties, LifeStorage, MWest Properties, P3 Logistic Parks, Taylor Morrison Home Corporation and the Woolgate Exchange building in London.