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Asset Management / Europe
Patron Capital raises US$920 million for Fund VII
Many Japanese investors look to value-added opportunities in European real estate
The Asset 13 May 2024

Pan-European institutional investor Patron Capital, which focuses on property-backed investments, has closed its seventh flagship fund, raising in excess of 143 billion yen (US$918 million), including more than 33 billion yen of Patron discretionary co-investment capital for larger opportunities.

Of the capital raised for Patron Capital, L.P. VII (Fund VII), 76% came from the company’s existing investor base and relationships, with many commitments coming from Japanese investors looking to take advantage of strong value-add investment opportunities in European real estate. Around 12% of the capital raised for Fund VII came from Japanese investors, including pension funds, endowments, foundations and family offices.

Fund VII, the company notes, will continue the same investment strategy as its previous funds, opportunistically targeting distressed and undervalued investments, directly or indirectly related to property, across Western Europe.

The fund will invest across a range of sectors in property-backed corporate investments as well as individual properties. The company’s typical deal size ranges from 5 billion to 13 billion yen in equity.

This is the seventh vintage in the company’s flagship series, which targets returns of 17% to 20% gross internal rates of return and a 1.6 times to 2.0 times gross equity multiple on invested capital over a four-to-five-year investment horizon. However, the company regularly exceeds these numbers, highlighting the firm’s ability to add value through asset management and time acquisitions and disposals for the best results. 

The company has already started to deploy capital from the fund, using approximately 10% of its investment capacity to complete a number of investments across a range of asset classes in western Europe, and is projecting a 18% return on its investments.

Keith Breslauer, the company’s managing director and founder, says: “The current opportunity set in real estate is one of the most exciting I have seen.”

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