Partners Group raises record RE secondaries fund

Zug, Switzerland-based private markets manager, Partners Group, has closed on nearly $2 billion for investment in real estate secondary limited partner stakes, according to a statement.

Partners Group Real Estate Secondary 2013 closed on $1.95 billion, significantly more than the fund’s initial target of $1 billion set last October.

It also means the firm has beaten its own fundraising record for the strategy, set in 2010, when it raised $1.5 billion for its Partners Group Real Estate Secondary 2009 fund.

The haul reinforces the increasing appetite from institutions in investing in real estate secondaries. Toronto-based advisory firm Setter Capital said earlier this year that 14 percent of all secondaries transactions in 2013 – equivalent to $5.3 billion – related to real estate.

Partners said the market for buying LP interests was potentially far larger and that it had screened more than $100 billion of real estate secondaries, choosing to transact “very selectively” $2.7 billion of that total to date.

The fundraising dwarfs all others in the still-nascent real estate secondaries marketplace, but other firms also are courting attention from investors. Landmark Partners is currently raising a vehicle with a target of $1 billion. It had collected $670 million as of last month.

In addition, the marketplace has seen new entrants recently. In July, for instance, global asset manager Aberdeen Asset Management announced its debut real estate secondaries fund was also oversubscribed and closed at its hard cap of €300 million. Earlier this year StepStone acquired Clairvue Capital Partners in an effort to better establish its presence in the marketplace. The firm could be gearing up to launch its debut real estate secondaries fund.

Partners’ latest fundraise should see it meaningfully increase the $8 billion-plus of real estate assets it currently has under management. Indeed, the firm said in its announcement that the new vehicle had already invested in “several” property portfolios.

Marc Weiss, partner and global head of private real estate secondaries, stated: “The demand for this programme highlights intense interest from institutional investors across the world for access to this real estate investment strategy. We are the market leader in the field of real estate secondaries and we believe this growing investment area is now coming of age, as underscored by the closing of our 2013 programme.”