Taiwan-based Fubon Life Insurance Co., a subsidiary of Fubon Financial Holding Co., has subscribed a stake in TPG Real Estate Partners III for $50 million, according to Reuters.
TPG Real Estate Partners III, managed by TPG Capital, is a $3 billion fund currently in the market. It was launched in November 2011, reported by IREN. TPG Real Estate Partners III is a noncore real estate investment fund. The fund will implement a buy and build strategy, acquiring assets in inefficient and fragmented markets. Like its predecessor, it will work with real estate operating companies. This differs substantially from the practice of most opportunistic funds, which tend to focus on direct acquisition of individual properties.
The firm’s primary focus is building platforms and growing enterprise value rather than acquiring single assets and creating value only at the property-level. Platform build-outs can be executed outside the competitive bidding process more easily than individual value-add assets, and provide greater financing flexibility and exit opportunities.
Key attributes of the firm’s strategy include: complexity and operational intensity, large size and scale, discount valuations, avenues for operational improvements, financing flexibility, and multiple exit alternatives. By targeting investments with these attributes, the firm believes it can source investments at discounted asset valuations.
The firm primarily targets real estate investments needing $100 million to $300 million in equity, but will make initial smaller equity investments to purchase a platform with future growth capital needs.
