Investors - OCTOBER 1, 2013

Paladin’s fourth Latin American fund looks for new investors

by Andrea Waitrovich

Paladin Realty Partners has plans to formally market its fourth Latin American fund, Paladin Realty Latin America Investors IV (LatAm IV), to new investors.

 The opportunistic fund launched pre-marketing discussions with existing investors in 2012 with a $400-500 million fundraising goal. The firm held a $75 million initial in February after an investment by California State Teachers' Retirement System.  Subsequently, Overseas Private Investment Corp made a $100 million commitment, which is expected to close by year-end 2013.

Paladin has declined to comment on its fundraising activities.

LatAm IV may hold a second close at the end of 2013 and complete its fundraising by the end of 2014.

The vehicle continues Paladin's 15-year investment strategy that to date has spanned more than $5 billion of assets in seven countries across Latin America.

LatAm IV will invest about two-thirds of its capital in low- and middle-income for-sale housing projects and the remaining capital in opportunistic commercial real estate investments, primarily in Brazil, Peru, Colombia and Mexico.

The $75 million in capital that was raised initially has been almost fully invested with  existing joint venture partners.  Paladin Realty Partners has approximately two dozen partnerships in the region and expects that over half of the fund’s investments will be made with those local entities LatAm IV has a total of four completed investments with two in preliminary discussions.

Last week, the firm announced that LatAm IV created a real estate development joint venture with longtime partner CCIASAC. The venture is called Tucan III. In August, LatAm IV invested $10 million in a Costa Rica home-building joint venture called GVL III. Its partner is CSC Management and Development, S.A.

In March, LatAm IV made an initial investment with YOU Inc. Incorporadora e Participações S.A. to develop middle-income housing in São Paulo, Brazil. The fund made a second Brazil investment in May called A-PIMA II. The $60 million partnership with Construtora Altana plans to develop more than 2,400 low-income and lower/middle-income residential units.

Paladin Realty’s prior fund, LatAm III, closed in 2011 with $554 million of commitments and is fully invested.


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