Patron Capital’s seventh fund closed after raising €860m

Patron Capital has closed its seventh fund having raised more than €860 million, including more than €200 million of discretionary co-investment capital for larger opportunities.

Keith Breslauer.

Of the capital raised for the fund, Patron Capital, LP VII, 76% originated from existing investors and existing relationships. Most came 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.

Patron said in a statement that the fund will utilise the same investment strategy as previous funds, opportunistically targeting distressed and undervalued investments in Western Europe. These can include assets directly or indirectly related to property and the fund will invest across a range of sectors in property-backed corporate investments as well as individual properties.

Patron said its typical deal size ranges from €30 million to €80 million in equity, enabling a granular approach and access to opportunities that are off market or not accessible to other investors. Larger opportunities can be targeted using co-investment capital.

Patron’s flagship series 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.

Patron has begun deploying capital from Fund VII, using approximately 10% of the fund’s investment capacity to complete a number of investments from which it is projecting an 18% return on investment.

“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,” said Patron Capital founder and managing director Keith Breslauer.

“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.”