Latin America-Focused Private Real Estate Fundraising – March 2012

by Jonathan Ma

  • 30 Mar 2012
  • RE

As of March 2012 there are 14 solely Latin America-focused private real estate funds on the road, targeting an aggregate $3.6bn. Historically, between the years 2003 – 2012 there have been 47 Latin America-focused funds that have closed, raising a total of $16.6bn from investors.

In recent years, Latin America-focused real estate fundraising has seen a decline in aggregate commitments. Fundraising for such vehicles peaked in 2007, when eight funds raised a total of $3.6bn, an increase from the $2.2bn raised by five funds in 2006. From 2007 onwards, however, aggregate commitments declined gradually from $3.6bn to $0.9bn in 2010. Furthermore, during this period, the number of funds that closed fell from eight to four in 2010. Despite this, there was a notable recovery in 2011 when seven funds raised a total of $3bn, an increase of $2.1bn from 2010. In 2012 to date, one Latin America-focused fund has closed, raising a total of $0.8bn. With 14 funds on the road targeting $3.6bn, 2012 may see a continuation in the recovery seen in 2011.

Of the Latin America-focused private real estate funds currently on the road, nine have adopted a diversified property strategy and five funds are targeting specific property sectors. Funds targeting a diverse range of properties are seeking $2.6bn, while funds focusing on specific sectors are hoping to attract $1bn from investors.

In terms of location investment focus within Latin America, six funds are targeting Brazil, with an aggregate target of $2bn, while three funds have a pan Latin America focus, with an aggregate target of $0.7bn. Similarly, three funds are focusing on Mexico; however the aggregate target for these vehicles is lower, standing at $0.5bn. One fund is Peru-focused and is targeting $0.3bn, and one fund is Columbia-focused targeting $0.1bn.

The largest Latin America-focused private real estate fund currently on the road is Hemisferio Sul Investimentos Fund IV. Managed by Hemisferio Sul Investimentos, the fund is targeting $650mn from investors and adopts a value added strategy, with a focus on Brazil. Brazil remains the most popular location focus amongst the five largest funds on the road. Other Brazil-focused funds include SDI Brazil FIP and PLA Industrial IV, two opportunistic vehicles that are targeting $450mn and $350mn respectively. The third largest Latin America-focused real estate fund is Paladin Realty Latin America Investors IV. The fund is seeking $450mn, with an opportunistic strategy focused on the whole of Latin America, particularly Brazil, Colombia, Peru, Chile and Mexico. Artha LD Fund is the fourth largest Latin America-focused fund on the road. The value added fund is targeting $350mn and is focusing on investment opportunities in Mexico.

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