Latin America-Focused Private Equity Real Estate Fundraising

by Farhaz Miah

  • 23 Sep 2011
  • RE

From 2005 to 2007, Latin America-focused private real estate fundraising trebled from $1bn to $3bn, with the number of funds solely focused on Latin America peaking at nine funds in 2007. In 2008, fundraising for Latin America-focused vehicles dipped to $2.5bn and declined to $1.8bn raised by six funds in 2009

In 2011 YTD however, five funds have closed raising an aggregate $1.8bn in commitments, exceeding the total amount of capital raised in 2010 by 100%. Prosperitas Real Estate Partners III, a $750mn opportunistic and value added vehicle managed by Prosperitas Investimentos that will invest across industrial and residential assets throughout Brazil is the largest fund to close so far in 2011. Tishman Speyer Brazil Fund III and Pátria Brazil Real Estate Fund II have also closed in 2011, raising $350mn and $550mn respectively.

Fundraising for Latin America-focused private equity has recovered, with investors seeing attractive opportunities to invest in the region. In light of this, it is unsurprising that Latin America-focused funds have accounted for a significant 7.9% of all private equity real estate fundraising in the period January – September 2011. In contrast, Latin America-focused funds accounted for 2.0% of all fundraising in 2010, and 3.5% in 2009.

There are currently 11 Latin America-focused private real estate funds in market, seeking to raise an aggregate $3bn. This represents 2.4% of the total number of funds in market and 1.9% of the total capital targeted. The largest Latin American-focused real estate fund currently fundraising is GTIS Partners Brazil Real Estate Fund II, managed by US-headquartered GTIS Partners. This opportunistic Brazil-focused fund is looking to raise $600mn from investors and seeks to team up with local operating partners to develop and redevelop Brazilian properties, focusing on the office and residential sectors.

A total of 55% of the Latin American funds in market and 57% of the aggregate target commitments are being raised by firms located domestically, with 45% of funds and 43% of aggregate capital are raised from firms located elsewhere.

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