PATRIZIA closes discretionary fund at €750 million

PATRIZIA closes its discretionary fund at €750 million

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 EUR 750 million. 

In the latest round of fundraising, which was oversubscribed, a further EUR 116 million 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, the Middle East and Asia, the Fund is the largest in the PATRIZIA TransEuropean series, surpassing TransEuropean Property LP VI (“TEP VI”) which raised EUR 430 million of equity.

TEP VII will pursue a cash-flow driven, value-add strategy across the office, logistics, residential and retail sectors in both Europe and the UK, benefiting from PATRIZIA’s operating platform approach.  Having already committed to a number of investments, primarily in the logistics sector, in markets such as Madrid, Barcelona, Milan and Avignon, the programme has in excess of EUR 1 billion of ‘dry powder’ to deploy over the next three years.

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Paul Hampton, Fund Chairman of the TEP series at PATRIZIA, said: “That this fund was over-subscribed with a significant amount of capital committed during the COVID-19 pandemic, is clearly very pleasing  and we would like to take this opportunity to thank all of our investors for their support over the past months. 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.”

The TEP series of funds was first launched in 1992 and has invested over EUR 2.8 billion in 13 European countries.  Since 2008, the current fund team has generated a 24.8% IRR pa*.  TEP VI is now in its liquidation phase and on track to exceed its return targets with c. 30% of assets sold, including the off-market disposal in October 2019 of a portfolio of French logistics assets which released a 2.7x net equity multiple back to the fund.