Strategic Partners collects $787m for RE secondaries

Strategic Partners Real Estate VII is targeting very mature assets in major cities with the potential for quick sales.

Strategic Partners’ secondaries unit has held a first close on its seventh real estate secondaries programme.

The Blackstone business has raised $787 million for Strategic Partners Real Estate VII from 55 investors, according to two filings with the US Securities and Exchange Commission. An offshore vehicle accounted for $166.5 million of the total.

New York-headquartered JP Morgan Securities and iCapital Securities, and Montevideo, Uruguay-based Compass Group Global Advisors are listed as placement agents.

Fund VII was registered in November last year, according to Secondaries Investor data. Its target is unclear.

Predecessor Fund VI raised $1.3 billion between 2014 and 2016, against a target of $750 million. Limited partners include Ohio Public Employees Retirement System, which committed $200 million.

Strategic Partners’ real estate funds target very mature, low-risk assets in major cities, according to a video on the firm’s website. Head of real estate secondaries Mark Burton said the firm was particularly drawn to assets that offer steady cashflows, low leverage and the possibility of a quick sale.

Private equity secondaries fund Strategic Partners VIII closed in July on $11.1 billion.

Real estate secondaries transaction volumes fell almost 40 percent year-on-year to $1.9 billion in the first half of 2019. This is due to the inherently lumpy nature of the market, said Mike Evans, vice-president of intermediary Setter Capital.

According to data from secondaries buyer Landmark Partners, the value of real estate GP-led deals increased to $2.1 billion in 2018 from $1.4 billion the year before, even as overall volumes declined to $5.3 billion from $6 billion the year before, Secondaries Investor reported.

Strategic Partners did not return a request for comment by press time.