Patron Capital, the pan-European institutional investor focused on property-backed investments, has closed its seventh flagship fund, raising in excess of €860 million, including more than €200 million of Patron discretionary co-investment capital for larger opportunities.
Of the capital raised for Patron Capital, L.P. VII (‘Fund VII’), 76% came from Patron’s existing investor base and existing relationships, with the majority of commitments coming from the US and Canada, followed by Asia Pacific, Europe, and the Middle East. Investors included pension funds, sovereign wealth funds, endowments, foundations and family offices.
Fund VII will continue the same investment strategy as Patron’s 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. Patron’s typical deal size ranges from €30 to €80 million in equity, enabling Patron to deploy its granular approach and target opportunities that are off market or not accessible to other investors, while Patron is able to realise larger opportunities using its co- investment capital.
This is the seventh vintage in Patron’s flagship series, which targets returns of 17% to 20% gross IRR and a 1.6x-2.0x gross equity multiple on invested capital over a four-to-five-year investment horizon. However, Patron regularly exceeds these numbers, highlighting the firm’s ability to add value through asset management and time acquisitions and disposals for the best results.
Patron has already started to deploy capital from Fund VII, using approximately 10% of the Fund’s investment capacity to complete a number of investments across a range of assets classes in western Europe, specifically in the UK, Germany, Netherlands, Portugal and Spain, and is projecting a 18% return on its investments.
Keith Breslauer, Managing Director and founder of Patron Capital, shared that “in the 25 years since Patron Capital was founded, we have worked successfully through many cycles and can say with confidence that the current opportunity set in real estate is one of the most exciting I have seen. However, while many can see distressed and undervalued assets coming to the market, few have been able to raise the capital needed to execute. Raising the capital for Fund VII at the pace we have and with a high proportion of re-ups from our longstanding investors is a very strong endorsement of Patron as the manager of choice for value-add and opportunistic real estate in Europe.
Looking ahead, we shall continue deploying this capital using our granular approach, with our deep relationships across Europe providing access to opportunities that others cannot realise, while maintaining conversations with prospective investors who wish to use our expertise to execute on larger transactions through co-investment.”
