Landmark RE likely to be oversubscribed

Landmark Partners’ seventh real estate secondaries fund is on pace to be oversubscribed, Secondaries Investor has learned.

The fund has received more interest than it has room for, a source familiar with the matter said.

Landmark declined to comment.

Landmark Real Estate Partners VII launched earlier this year with a $1 billion target. It had collected $670 million as of August, after holding a first close on $560 million in April. The fund is expected to close within the next few months.

Fund VII limited partners include Oklahoma Teachers Retirement System and the Board of Regents State of Iowa, according to PEI’s Research and Analytics division. The Nebraska State Investment Council is also an LP in the fund. It initially committed $40 million from its defined benefit portfolio but decided to commit an additional $7.5 million from its endowment fund in September.

Limited partners in the fund will pay a 1 percent management fee. The preferred return rate is 9 percent and cashflows are split 60/40 (GP/LP) until the 12 percent carried interest is met.

The fund also has a co-investment vehicle for overflow deals. The size of the vehicle is unknown but Landmark previously filed documents with the US Securities and Exchange Commission for a $200 million co-investment fund with the Ohio Public Employees Retirement System.

Fund VII will acquire real estate fund stakes on the secondaries market. About 30 percent of the fund can be invested outside the US.

Last month, Landmark used Fund VII to buy a pair of fund stakes from The Regents of the University of Michigan. Funds in the portfolio include Arminius Real Estate Opportunity Fund, which closed on €252 million, a  2008-vintage fund, and Europa Fund III, a €731 million 2007-vintage fund.

Landmark’s prior real estate secondaries fund closed on $718 million in 2011. The fund was generating a 29.8 percent net internal rate of return as of 31 March, according to Nebraska documents.

Landmark is also expected to close its 15th private equity secondaries fund on $3.25 billion in December, a source familiar with the matter told Secondaries Investor last week.