NorthStar Realty Finance received $182 million in distributions from its real estate secondaries investments during the third quarter, according to the company’s quarterly earnings results.
“During the third quarter we received $182 million in distributions from our investment portfolio, which in turn produced $55 million of net income for NorthStar,” Jonathan Langer, chief executive officer at NorthStar, said during the company’s third-quarter earnings conference call on Monday.
But the company anticipates that realisations will come down in the next few quarters.
“While overall distributions were substantial at $182 million for the quarter, the timing of certain realisations is now expected to occur over a longer period of time,” Debra Hess, chief financial officer at NorthStar, also said during the conference call.
“Despite the delay in realisations, these private equity investments continue to perform well. Private market valuations, which are particularly relevant to the majority of these investments, are very strong, and we expect to continue to deliver compelling risk-adjusted returns in this portfolio.”
NorthStar’s private equity investments, which represent the firm’s limited partnership interests in real estate private equity funds acquired in the secondaries market, stood at $1.43 billion, or 7.2 percent of its total assets, as of 30 September, mostly unchanged from $1.47 billion as of 30 June.
During the third quarter, NorthStar purchased a $100.4 million-portfolio of 15 fund stakes across five general partners for $50.2 million plus deferred payments of $47.8 million over the next two years, according to the filing. The transaction had an initial close on 9 September and the company expects holding a final close on the fund interests in the fourth quarter once it receives consent from the GPs of the underlying funds.