Partners Group has bought 31 investors out of a troubled Chinese property fund.
The fund manager acquired $120m (€89.8m) in commitments from limited partners (LPs) in the $1bn Trophy Property Development (TPD) fund.
The deal makes Partners Group the second largest LP in the vehicle, which is invested in five projects in China.
The fund, which was launched by Winnington Capital in 2007, was restructured last year and the manager replaced by Venator Real Estate Capital Partners.
According to Venator, which initiated the secondary market auction, around 40 LPs – representing $200m in fund commitments – registered their interest to exit TPD in the first half of last year. Roughly 20 parties, including existing and prospective investors, registered their interest to acquire new or further commitments.
Partners Group won the bidding process for $120m in commitments held by 31 LPs. It was not revealed what transpired with the remaining investors that were seeking to exit.
Partners Group has raised capital for a dedicated ‘secondaries’ strategy where it will seek to buy into existing real estate funds on the secondary market. It has claimed to have invested $2.7bn in secondaries globally.
Marc Weiss, partner and head of real estate secondaries, said Partners Group had been “monitoring” the TPD portfolio for several years, going back to be before Venator took over management.
Weiss said the programme had been “successfully restructured by Venator” and now had a “strong management team” in place.
Once installed, Venator extended the life of the seven-year fund to April 2017.
It also negotiated the sale of TPD’s minority stakes in the five projects to its development partner Shui On Land in exchange for a majority stake in Taipingqiao 116, a 968,000 sqft residential development in central Shanghai. The asset swap is expected to close in the third quarter.
Partners Group said it would be a “unique opportunity to develop one of the most desirable submarkets” in the city.