Weinberg Capital raises first capital since team exit – Exclusive

The newly rebuilt property business of the French investment manager is seeking to raise its largest-ever value-add fund.

Weinberg Capital Partners
Debut deal: this office asset in the 9th arrondissement of Paris was its first acquisition for the fund

Weinberg Capital Partners has reaffirmed its re-entry into real estate by closing on its first round of fundraising since the departure of its prior property team last year, PERE has learned.

The Paris-based investment manager has captured €110 million in the initial close for its third value-add real estate fund, Weinberg Real Estate Partners III. The fund, which was launched at the beginning of the year, has a target of €250 million and a hard-cap of €300 million.

WREP III is the first fund raised under Weinberg Capital’s new real estate team, led by partner and managing director Jean-Philippe Olgiati. The former BlackRock executive was hired in November 2018 after its former property team led by Laurent Halimi spun out in July that year and created a new firm, Osae.

Jean-Philippe Olgiati Weinberg
Jean-Philippe Olgiati

WREP III’s investment strategy will be focused on repositioning and development, mainly in the office sector in Paris. At least 80 percent of the fund’s capital is expected to be invested in France, with the remainder to be allocated to the German cities of Munich, Berlin and Hamberg.

The firm has also completed its first acquisition for the fund, an office asset in the 9th arrondissement of Paris. The building, which was purchased vacant in September, was fully leased to a legal tenant by late October. A second deal – which would bring total equity deployed to 40 percent of the first close amount – is expected to be completed by year-end.

“There’s a lot of competition in the market but also liquidity, so if you’re smart you can find good opportunities in this cycle,” Olgiati said.

Of the €110 million raised in the initial close, 50 percent came from French investors, while the remaining half came from North America. Investors include family offices, insurance companies and pension plans. Re-ups represent approximately 40 percent of the capital raised.

“We’ve managed to convince our clients we have the right platform,” Olgiati said of the firm’s real estate team change. The continued presence of Weinberg Capital founder Serge Weinberg, who was involved in sourcing deals and making key decisions in areas such as leasing, was a key factor.

He added that an entirely new team to replace the Halimi-led group would offer stability to the firm’s property business. “We all came for same goal, we all left good positions at great companies,” Olgiati said. “We all want to have a successful platform.”

If successful, the fund would be Weinberg Capital’s largest real estate vehicle to date. The firm previously closed on nearly €200 million on WREP II in July 2013 and €83 million on WREP I in January 2010, according to PERE data.

WREP I, which is fully harvested, is generating a realized net internal rate of return of 18 percent, while WREP II has been invested in seven transactions with a net projected return of approximately 15 percent. WREP III similarly has a net return target in the mid-teens.

Founded in 2005, Weinberg Capital initially focused on leveraged buyouts before expanding into real estate in 2008 and listed French companies in 2015.