Partners Group in US industrial preferred equity deal

Related images

  • Partners Group in US industrial preferred equity deal

UNITED STATES - Partners Group has taken a preferred equity stake in Garland Business Park, an industrial asset in Dallas, Texas - identified by the group as one of the strongest regional economies in the US.

The group described the $17.5m (€14.3m) asset in a statement as "quality real estate leased to a diverse group of creditworthy tenants in a strong location with positive economic momentum". 

Mike Zeto, vice-president in the private real estate team, told IP Real Estate preferred equity offered Partners Group a combination of downside protection and decision-making rights that would not have been available with a straightforward debt investment.

"The advantage of preferred equity compared with more typical debt structures is that it gives us an opportunity to share in the potential equity upside," he said.

"It also gives us an opportunity for equity-like decision rights while still providing downside protection from a preferred position in the capital structure."

As a preferred equity investor, the €25bn Partners Group will take priority over Dallas-based operator Westmount Realty Capital - in contrast to common equity deals, where the investors would be pari passu.

The equity upside in this case would likely arise in the form of active management to reduce vacancies and bring rents up to market rates.

Zito did not rule out further preferred equity deals, along with common equity investments. "It isn't as typical as common equity or debt, but this isn't our first preferred equity investment," he said. "It depends on what the available opportunities available. But, yes, we do have an appetite to do more."

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Now