Patron raises €860m for new fund

Patron Capital, the pan-European institutional investor focused on property-backed investments, has closed its seventh flagship fund, raising in excess of €860m (£739m). More than €200m of the €860m raised will be for larger opportunities. Of the capital raised, 76% came from Patron’s existing investor base and existing relationships, with the majority of commitments coming 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. Fund VII will continue the same investment strategy as Patron’s previous funds, opportunistically targeting distressed and undervalued investments, directly or indirectly related to property, across Western Europe. The fund will invest across a range of sectors in property-backed corporate investments as well as individual properties. Patron’s typical deal size ranges from €30m to €80m in equity. The fund is targeting returns of 17-20% gross IRR and a 1.6x-2.0x gross equity multiple on invested capital over a four-to-five-year investment horizon.  Patron Capital managing director Keith Breslauer said: “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. “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.” He added: “Looking ahead, we shall continue deploying this capital using our granular approach, with our deep relationships across Europe providing access to opportunities that others cannot realise, while maintaining conversations with prospective investors who wish to use our expertise to execute on larger transactions through co-investment.”