European fund manager Patrizia has announced the final close of its flagship discretionary value-add fund, TransEuropean VII LP (TEP VII), which has reached its equity hard cap of €750 mln, as tipped by PropertyEU last week.
In the latest round of fundraising, which was oversubscribed, a further €116 mln of new equity commitments were secured, following the previous close announced at the end of January 2020.
Backed by both existing and new institutional investors from the UK, Europe, the US, Middle East and Asia, the fund is the largest in the Patrizia TransEuropean series, surpassing TransEuropean Property LP VI which raised €430 mln of equity.
TEP VII - the largest in the long-running fully discretionary fund series ever raised - will pursue a cash-flow driven, value-add strategy across the office, logistics, residential and retail sectors in both Europe and the UK, with a total firepower with leverage estimated at €1.8 bn. Having already committed to 11 investments, primarily in the logistics sector, in markets such as Madrid, Barcelona, Milan and Avignon, the programme has in excess of €1 bn of ‘dry powder’ to deploy over the next three years.
‘That this fund was over-subscribed with a significant amount of capital committed during the Covid-19 pandemic, is clearly very pleasing,’ said Paul Hampton, fund chairman of the TEP series at Patrizia. ‘I have no doubt that our long-term track record in and continued focus on generating performance from cashflow enhancement has contributed towards this success. Clearly our primary aim is now to deploy this equity strategically – and to that end, we feel optimistic that current market conditions should play to our strengths as one of Europe’s largest real estate operating platforms, with experienced deal originators and asset managers employed in each of our pan-European target markets.’
TransEuropean was first introduced in 1992 by London-based Rockspring Property Investment Managers, which Patrizia acquired in December 2017 - one of three takeovers it executed that year.
Since inception, the TransEuropeam series has generated a 12.6% per annum Internal Rate of Return (IRR) and has invested in 13 European countries. Fund VII is significantly larger than Fund VI, which closed on €428.5 mln in 2016 and Fund V, which finished on around €350 mln in 2012.
