The Real Deal Miami

Cushman parent TPG raises $2B real estate fund

Private equity giant plans to invest in high-risk assets

October 08, 2015 01:30PM

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TPG's co-founder David Bonderman

TPG’s co-founder David Bonderman

From the New York websitePrivate equity firm TPG raised a new $2-billion real estate fund, looking to capitalize on growing institutional appetite for bricks and mortar.

The company, which has $75 billion in assets under management and recently bought commercial brokerage Cushman & Wakefield, plans to invest the money in high-risk real estate. Unlike rival private equity giants like Blackstone and Apollo Global Management, TPG has not been a big property buyer. Instead, it has invested in real state companies, buying self-storage company LifeStorage in 2014 and this year dishing out $2 billion for Cushman through its subsidiary DTZ.
The Wall Street Journal reports TPG began raising the fund in early 2014. “This took roughly around the time we expected, maybe a bit longer,” Kelvin Davis, the senior partner at TPG who is co-head of its real-estate business, told the paper. “We had to build some relationships from scratch, and understandably that takes time.”

Private real estate fund managers are benefiting from record-low bond yields around the globe, which make real estate more attractive in comparison. But while it’s arguably never been easier to raise cash, growing competition for deals has also made it harder to meet return targets. This forces fund managers to be creative, for example by investing in high-risk real estate or entering new markets. [Wall Street Journal]Konrad Putzier