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Penn Square closes first RE vehicle

The Pennsylvania-based fund of funds closes its first real estate outing on $231 million of commitments, almost double the initial target, targeting global opportunistic investments.

Penn Square has closed its first real estate fund of funds, Penn Square Global Real Estate Fund I, on $231 million (€147 million). The firm had originally targeted $100 million.

The Radnor, Pennsylvania-based firm said it would focus on international opportunistic investments in order to keep a diversified portfolio. Investment decisions will be made by Cleveland-based advisor, The Townsend Group.

Penn Square co-founder Gui Costin said the fund had already invested in 14 private equity real estate funds. The firm was looking to invest in funds in countries such as China, India, Brazil, Mexico, parts of Europe including Central and Eastern Europe, he said.

However the current market dislocation was also making the US an attractive place for investments, Costin added, telling PERE: “The US in all likelihood will be an attractive place to invest going forward for investors today with fresh capital.

“Our key strategy is diversification. In opportunistic investing you need to have a strategic diversity, a diversity of property type and a geographic diversity.”

Limited partners are increasingly looking to the fund of funds industry to offer expertise on real estate investments, particularly in emerging markets, an industry conference was told yesterday in New York. “The market is going to grow,” said Franklin Templeton/Fiduciary Trust managing director Marc Weidner at the IMN US Real Estate Opportunity and Private Fund Investing Forum.