Prelios has teamed up with Secondcap in an arrangement that says as much about the growth in real estate ‘secondaries’ as it does about the potential for institutional capital to shift in and out of Italian property markets.
The institutional fund management arm of Prelios has developed “an innovative partnership” with Secondcap, according to Paolo Scordino, CEO of Prelios SGR, which will “increase the liquidity” of clients’ investments.
Secondcap has been running a secondary market platform for trading stakes in closed-ended funds since 2011, typically in the private equity sector, but increasingly in infrastructure and real estate.
Already this month, IP Real Estate has reported on developments in the secondary market for real estate funds, including StepStone’s acquisition of Clairvue Capital and the final close of Aberdeen Asset Management secondaries fund of funds.
Francois Gamblin, CEO of Secondcap, told IP Real Estate it was “quite logical” to expect the real estate fund secondary market to eventually “have the same kind of turnover to private equity”.
Secondcap has approximately 420 investors on the platform that could be potential buyers of limited-partner positions. For the most part, they will be more focused on private equity, but given Gamblin’s expectations, this could change.
These investors will have potential access to Prelios SGR’s 25 funds which manage some €3.7bn of assets.
With Italy expected to become the next European real estate market after Spain to become a major target of international and opportunistic capital, the arrangement could be timely. Just this week, Allianz Real Estate and ING acquired a shopping centre in Genoa, and AXA Real Estate and Apollo bought an Italian retail portfolio.
At the same time, many Italian institutions are looking to dilute their domestic exposure and begin redeploying in overseas property markets.
Scordino describes the arrangement with Secondcap as a “privileged channel for our clients, increasing the liquidity of their investments”. He said: “Accessing a more buoyant market means being able to seize more opportunities to increase the investment value faster and at lower costs.”
Secondcap has been working some Italian foundations “that are now willing to get some liquidity out of their investments”, Gamblin said. “We are also seeing some situations in Italy where GPs are looking to restructure their funds and the leverage they have.”