BentallGreenOak closed its third European value-added fund at more than €1.9 billion ($2.3 billion), Toby Phelps, managing partner and head of European equity, said in an interview.
GreenOak Europe Fund III closed with €1.5 billion in commitments and a further €450 million in co-investments, surpassing its initial target of €1 billion.
More than 50% of capital has been deployed in 27 investments in Denmark, France, Germany, Italy, the Netherlands, Norway, Spain and the U.K.
About 85% of the fund's investors are existing clients — "a good sign we're ... doing a good job on our existing funds," Mr. Phelps said.
The fund focused on markets where BentallGreenOak has people on the ground with history and relationships in the market. "In a world where everything is trying to be disintermediated ... so much business still happens through word of mouth and relationships. As (we've) built the team over the last 10 years or so, we've really focused on adding people that know what they're doing but also (have) depth of local relationships that leads to deal flow. Our ability to source attractively priced opportunities" resonates with investors, Mr. Phelps said.
In terms of sectors, the firm has focused on logistics since 2014. "Whilst (it's) really flavor of the month now, we've been in it a along time," Mr. Phelps said. About 80% of the assets already deployed in fund III are in logistics assets.
Outside logistics, "we are also focused on other sectors where we see that structural driver of underlying occupational demand and limitations on supply: life sciences, data centers and in some very specific markets, residential-for-sale — that's really a Madrid, Barcelona focus for us," Mr. Phelps said. Life sciences is a U.K. play while the firm owns data center assets in London and Norway.
The logistics theme is consistent across Europe. "Whilst there's a lot of capital chasing it today, the majority is chasing the stabilized, core asset — our strategy is very much to create that core product for very strong institutional demand — acquiring existing assets that have vacancy or need some capex spent on them, or buying land" and forward-purchase funding projects with builders, thereby creating new logistics assets — something the firm is doing in the U.K., France, Germany, Italy and Spain and will "no doubt end up doing in the Netherlands and Nordics as well."
Despite the impacts of the COVID-19 pandemic, the firm raised the majority of capital for the fund last year thanks to a lot of time spent on Zoom with investors and virtual site tours, using a combination of Google Earth, drones and "people on the team walking around whilst the investors are watching" via a video app.
Investors in the fund include the $84.2 billion Michigan Retirement Systems, East Lansing.
The $55 billion firm's European value-added strategies have invested more than €2 billion since 2014. The predecessor fund has already returned 80% of capital to limited partners. It closed in 2019 with about €650 million in commitments and another €150 million to €200 million in co-investments, Mr. Phelps said.
