Vision closes debut real estate fund on $210m

Vision Brazil Investments has closed its debut property vehicle, Brazil Real Estate Opportunities Fund, on $210 million.

The São Paulo-based real estate investment firm gained commitments from 15 North American and European investors, including public and private pensions, insurance companies and family offices – with more than half secured following September 2008, according to Vision founding partner Ken Wainer.

Brazil is where the USA was in the 1950s. It’s going through a credit expansion whereas the rest of the world is going through a credit contraction. Vision founding partner Ken Wainer

Many private equity real estate firms have struggled to close capital commitments in the wake of the credit crisis last year, with just 13 opportunistic funds closing on $4 billion of capital by the end of the second quarter, research by Clerestory Capital Partners shows.

Wainer told PERE Vision held a first close on BREOF last April, with roughly 30 percent of the target capital pre-specified for potential deals. To date the fund is more than 70 percent to allocated to two office developments, one office retrofit and seven affordable housing projects, all located in Greater São Paulo and Rio de Janeiro.

The firm is targeting the development of high quality office properties with the view to potentially selling the buildings to core real estate investors, including Brazilian pension funds, in around seven to 10 years.

“Brazil is where the USA was in the 1950s. It’s going through a credit expansion whereas the rest of the world is going through a credit contraction,” Wainer added. This expansion is feeding demand for high quality office properties, as well as the need for affordable housing.

However, Wainer went on to say that Brazilian public pension funds will play a crucial role in helping private equity real estate firms exit deals, as the investment community starts to increase its exposure to real estate, particularly direct core property. In September, the country's pension fund secretary Ricardo Pena gave pensions the right to hold up to 20 percent of their portfolios in structured funds that invest in sectors like real estate or infrastructure – up from 8 percent previously.

“The current exposure to real estate is about 3 percent overall but this will increase to between 8 percent and 15 percent. That is going to be a very powerful dynamic for the asset class,” Wainer said.