Praedium Group LLC is diversifying its investor base.
The firm invests in under-performing and under-valued real estate in multi-family, office, retail and industrial, focusing on mid-market deals in the United States and Canada, said Russell Appel, president.
Montreal-based CDP Capital-Real Estate Advisory — the real estate subsidiary of the C$102.4 billion (US$84.27 billion) Caisse de Depot et Placement du Quebec, Montreal — bought a major share of Praedium in 2000, the year after it split from former parent Credit Suisse First Boston. Caisse de Depot is a significant investor in Praedium's funds, but this time around Praedium executives have worked hard to expand the firm's roster of investors.
Praedium closed its sixth fund at $700 million July 31, $200 million over its target. It also had more investors than the previous fund — 36 institutional investors, up from 27 for fund V, including Caisse de Depot.
"I think it's an attractive business model," said Floyd Lattin, chief investment officer of New York based Praedium, referring to having a broad range of investors. "If there are any changes in any sector and if there is a diversified client base … there is less of an impact."
So, for example, if regulation changes make investing in real estate less attractive for a bank, the private equity real estate management firm would still have a solid base of other kinds of investors for the next fund-raising round.