GP-led actual property secondaries methods current a “compelling” alternative for buyers, a brand new report from Brookfield has discovered.
The funding agency highlighted these methods which have clear lively return levers and are led by managers who’ve a demonstrated capability to generate worth by way of operational experience.
The report famous that for the reason that world monetary disaster, secondaries have more and more emerged as a major section of the true property market, with room to develop inside a big investable universe.
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“Each LP- and GP-led secondaries have the potential to supply entry to high-quality belongings at beneficial entry factors, portfolio diversification, shorter payback durations, draw back mitigation and extra,” stated Brookfield.
“Given the amount of near-term fund maturities amongst small to midsize actual property funds, restricted actual property capital elevating and a difficult exit surroundings for funding gross sales, GP capital options – a kind of GP-led secondary – current a compelling alternative for non-core actual property allocations.”
Brookfield famous that actual property secondaries have been a uncommon vibrant spot within the economic system over the previous few years, and urge for food for bespoke liquidity options amongst GPs has grown.
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Brookfield stated that the non-public secondaries market has grown each within the variety of devoted funds and within the quantity of capital raised. But for actual property, the secondaries market remains to be in its early years.
Nonetheless, the funding supervisor believes that actual property secondaries fundraising is prone to proceed to develop.
“Because the GP-led market continues to broaden, GPs have gotten extra selective in who they crew up with,” the report stated.
“They’re on the lookout for companions that may present not solely capital but additionally complementary operational and capital markets capabilities as they full enterprise plans.”
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