Landmark passes halfway-mark on $1bn RE fundraise

Landmark is one of three large US firms currently fundraising for global real estate-focused secondaries funds.

Landmark Partners has held a first close on $560 million for its Landmark Real Estate Partners VII, according to a person familiar with the matter.

Limited partners in the fund include the Kentucky Teachers’ Retirement System and the Board of Regents of the state of Iowa, according to PEI data

The fund is targeting $1 billion and will acquire stakes in real estate funds and real estate partnerships that are typically at least two years old, according to Real Estate Alert, which first reported the first close.

Landmark, which declined to comment, has raised five funds dedicated to real estate secondaries, according to its website. The firm’s prior fund closed on $718 million in 2010.

Landmark is in market alongside Partners Group, which is also targeting $1 billion for its Partners Group Real Estate Secondary 2013 fund, according to PEI data. The fund has raised at least $178.5 million, according to documents filed with the US Securities and Exchange Commission in March.

Morgan Stanley Alternative Investment Partners is also fundraising for its AIP Phoenix Global Real Estate Secondaries Fund II 2013, which has collected $138.3 million toward its $500 million target, according to PERE data. Morgan Stanley’s prior real estate secondaries fund closed on $370 million, surpassing a $250 million target in 2010. The fund received commitments from Swedish pension fund Ap Fonden 3 and UK-based West Midlands Pension Fund.

AIP’s Phoenix funds target off-market secondary opportunities in private equity real estate funds that have “a sustainable strategy for generating superior returns across real estate cycles”, the firm said in a statement when its debut real estate secondaries fund closed.

The real estate secondaries market is picking up, but still lags the private equity market by between six and seven years, one real estate GP estimates.

“There are still only a couple of dedicated buyers in the space but it’s starting to follow the trends established on the private equity side of the business, which is a much more mature market,” said Landmark partner Robert Dombi, at the PERE Global Investor Forum in Los Angeles in April.