REAL ESTATE - Warburg Pincus has raised $1.2bn of equity for its first dedicated real estate investment fund - the commingled fund is Warburg Pincus Real Estate I, L.P.
The global private equity firm attracted capital from some of the largest pension funds in the country. There was a $100m commitment from the Washington State Investment Board.
A commitment of the same amount was issued from The New Jersey State Investment Council. Another investor in the fund is GE Asset Management. Some of the investors in the fund had a previous experience with the fund manager through its private equity funds.
Warburg Pincus, LLC and its employees will make a sizeable co-investment to the fund. This will be in the range of $40m to $50m. The commingled fund does have a 1% management fee. It has a targeted leveraged IRR of 25%. There is a 9% preferred return for investors.
Warburg Pincus has already committed to seven investments for the fund. These have a total capitalization of $350m. One of the commingled fund’s more recent transactions was setting up a JV with The Bascom Group to investment in nonperforming loans and distressed apartment properties. The total size of the venture is $200m.
Warburg Pincus will be focusing on deals that have growth and value creation investment opportunities. It will be looking at three major regions of the world. Half of the deals will be in Asia in countries like China and India. The second half of the transactions will be split up with North America and Europe.
Warburg Pincus has a significant track record investing in real estate transactions. It has invested $1bn worth of real estate deals and generated a realized 30% IRR.
The company has been active in the past in real estate investing in North America, Europe and Asia. It has invested in a vast array of property types. These have included homebuilding, retail, senior housing, hotels, self storage and land development.