Fundraising - JULY 2, 2014

Sparinvest holds €317m close for fund of funds

by Andrea Waitrovich

Copenhagen-based real estate firm Sparinvest Property Investors has held a €317 million ($433 million) close for its Sparinvest Property Fund III. The fund of funds has raised almost 60 percent more capital with this fund launch than with its predecessor. Fund III is already two-thirds committed.

SPF III continues its predecessors’ strategy. It focuses on the small and mid-cap real estate segment in the Americas, Europe and Asia.

“We are focusing on undermanaged properties with great potential for growing net operating income through hands-on management techniques, as well as development projects in high-growth markets with an undersupply of up-to-date properties,” says Bo Jensen, managing partner at SPI, in a statement.

SPF III is already two-thirds committed through eight partners and has invested in 150 properties located in the United States, England, Germany, Japan and China.

The largest part of SPF III’s portfolio allocation is in Asia, representing 37 percent, while America and Europe represent 36 percent and 27 percent, respectively. To date, the majority of its assets are in the residential sectors, representing 42 percent, and retail sectors, totaling 20 percent.

Investment strategies include seeking value-added multifamily and retail properties, bridge lending on transitional assets, and student housing developments. In the coming months, Sparinvest will seek to increase SPF III’s exposure to emerging markets in order to reach the target allocation to emerging markets of approximately one-third.

SPF III is expected to be fully committed by the second quarter of 2015.

Sparinvest Property Fund II closed with €200 million ($273 million) in 2011. SPF II is fully committed and approximately 75 percent drawn. Approximately two-thirds of the capital are allocated to mature markets and one third to emerging markets. SPF II loan-to-value ratio is approximately 50 percent. The global fund of funds has exposure to approximately 300 properties through 15 top-tier partners.

The investments are in 17 countries through six U.S. partners, four European partners and five Asian partners. The majority of the committed equity is in America and Asia, representing 36 percent each of the total capital. The remaining capital, 28 percent, is in Europe. The fund of funds has exposure to more than five property sectors, with a main focus on residential and retail, representing 39 percent and 26 percent, respectively.

The fund series’ debut fund, Sparinvest Property Fund, closed in 2006 with €480 million ($655 million) in equity commitments. SPF adopted a core-plus strategy with an emphasis on mature markets and core assets. Its portfolio consists of investments in managers with exposure to 400 properties in 21 countries. The largest part of its capital is in Europe, representing 46 percent, while the Americas and Asia represent 44 percent and 10 percent, respectively. The main exposure is to the retail and office sectors, at 35 percent and 31 percent, respectively.


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