Warburg Pincus has closed its first real estate opportunity fund on $1.2 billion (€940 million). Although this is its first dedicated vehicle, the private equity firm has invested more than $1 billion in the asset class over the past 20 years.
“We’ve moved to establish a separate fund for our global real estate investment activities at a time when the firm has seen its proprietary real estate deal flow increase substantially around the world,” said Warburg’s co-president Joseph Landy in a statement.
Michael Profenius, a partner in the firm’s real estate practice, said the dedicated fund provides Warburg with a “strong, dedicated capital base” that will enable it to take advantage of real estate investment opportunities on a global scale.
Institutional investors provided capital for the fund, including several long-term limited partners who have previously invested with Warburg Pincus, such as GE Asset Management, which highlighted the fund’s global investment strategy and the exposure it would provide to Asia.
“We believe that the real estate fund’s investment strategy, its integrated approach with its private equity business and its focus on entry-level investing are different and compelling,” Phil Riordan, GE’s senior managing director, said in a statement.
Warburg has invested across sectors in real estate, with investments spanning homebuilding, retail, senior housing, lodging, self-storage, land development and real estate services in North American, Europe and Asia.
Earlier this month, the firm acquired an 18 percent stake in Spanish homebuilder Grupo Pinar. In July, Warburg Pincus invested approximately $45 million in Lemon Tree Hotels, a New Delhi-based hotel company. The previous month, the firm announced the acquisition of Brandywine Senior Care, an operator of assisted living facilities, for an undisclosed amount.
The real estate fund represents the 12th fund the firm has raised over its four decades of operation.