Psssst have you heard that theres a secondary market in real estate limited partnership interests and it is just starting to gain momentum? Or so say the market players.
If this is news to you, its for good reason. The market is small and the transactions are secret.
A recent news release from one of the largest managers in the strategy or so they say revealed all the transaction details in the headline: Liquid Realty Invests $60 Million in Two Real Estate Opportunity Funds.
Scott Landress, managing principal and chief executive officer of Liquid Realty Partners, San Francisco, would reveal little about the particulars because of the parties privacy concerns. All he would say is that Liquid Realty bought interests in two U.S. funds for $60 million. The seller is a European institution that sold its entire private equity and real estate portfolio.
Its not that the firm isnt making deals. About 80% of Liquid Realtys $1.2 billion in real estate secondary interests were acquired in the last two years, Mr. Landress noted. By comparison, he estimates there has been less than $2 billion in transaction volume in the total secondary market during the past five years.
While Mr. Landress wont talk about fundraising, a regulatory filing says the firm is raising its fourth fund, with a target of up to $600 million. Thats $100 million less than the fund it closed in March 2006, its third. The C$110.8 billion (US$95.49 billion) Canada Pension Plan Investment Board, Toronto, invested $100 million in that fund.
Why is Liquid Realty raising a smaller fund this time around? Mr. Landress declined to say.