NORTH AMERICA - Franklin Templeton Real Asset Advisors closed off its capital raise at $313m (€250m) for its Franklin Templeton Private Real Estate fund, exceeding its targeted size by $13m.
Marc Weidner, manager director at Franklin Templeton and manager of the fund, said: "We were able to raise a good amount of capital in a difficult money raising environment. Investors today are looking for stable managers who have established themselves in the marketplace.
"I have been a partner with the company for 10 years, and other partners at our firm have been there for 13 or more years. Investors are looking for managers who have demonstrated they will be around to take the investors through the fund's entire process, until the last investment is sold and the proceeds are distributed back to the limited partners."
A wide variety of investors put capital into the private real estate fund, including a $75m commitment from the State Universities Retirement System of Illinois.
The pension fund said in an email that the projected net IRR on the investment would be at least 12%.
For the most part, the fund will be making investments into either commingled funds or co-investments that have existing assets or mostly pre-specified assets.
Weidner said: "There might be some limited opportunities where we would consider a blind pool kind of investment."
A typical size deal for the fund will be around $30m, with each investment comprising 8-9% of the fund.
The expected holding period for each investment will be 3-5 years.
The overall strategy for the fund is value-added. In many cases, this will involve properties that are overleveraged and need a new capital infusion.
The fund will target properties in the vintage years ranging from 2010 to 2013.
Investments will be made in the main property types of office, industrial, retail and apartments.
Capital will also be placed into niche areas such as nursing homes, hotels and student and/or senior housing.
Franklin Templeton began investing for the Private Real Estate fund in February of last year. So far, eight transactions have been completed, committing nearly half of the fund's capital.
Franklin Templeton said it wanted to distribute the capital evenly into three sectors around the globe.
Weidner said: "The plan is have 1/3 of the capital put to work in the Americas, 1/3 in Europe and 1/3 in Asia."