Peakside Capital Advisors has raised equity of €160 million at the first close of the Peakside Real Estate Fund IV.
Institutional investors and family offices across Europe are the main participants, many of whom are investors in the predecessor fund, Fund III.
The equity raised so far corresponds to 80% of the predecessor fund and Peakside is targeting €350 million at the final close which, with debt, would create spending power of up to €900 million.
The fund, which has a target IRR is of 15 % pa net, will focus on German property affected by pricing dislocations as well as opportunities that have value-add potential. Lot sizes will range between €30 million and €150 million.
“Returns in both funds II and III are significantly above expectations, affirming the trust the investors put in our products,” said Peakside managing partner Stefan Aumann.
Capital deployment in prospect
One asset is already under exclusivity and further acquisitions are in the pipeline according to Peakside which says that it expects more investment opportunities from the current crisis to surface in the second half of the year.
“In the current environment, we are of course specifically looking at investments in the logistics and residential sectors,” said Peakside managing partner Boris Schran. “At the same time, we are expecting several opportunities coming out of market distortions in the wake of the COVID-19 pandemic, particularly in the retail and hotel sectors, and specifically for assets which lend themselves to conversion into office or residential use.”
He adds that failed auctions or project developments with additional financing needs also offer attractive opportunities. “Despite the increase of people working from home, we still believe in office as an asset class.”