The New York-based multi-manager has closed its latest and largest offering on $825 million, hauling 10
percent more capital than its original target.

Katherine Bucaccio

New York-based Madison International Realty has held the final close on its latest fund, bringing in $825 million in equity commitments for its largest fund yet. Madison International Real Estate Liquidity Fund V attracted $75 million more than its target of $750 million.

Through Fund V, which was launched in October 2012, the firm is looking to acquire LP and partial ownership interests in core real estate assets and portfolios in the US, the UK and Western Europe.

Investors included US public pension funds such as the Employees Retirement System of Texas and West Virginia Investment Management Board, as well as corporate pensions, insurance companies, endowments, foundations and family offices. International investors included European institutions, Middle Eastern sovereign wealth funds and institutional investors from Asia and Australia. The firm employed placement agents Mercury Capital Advisors and Forum Asset Management for the offering.

“We are very pleased with the robust and broad support we received from investors around the world who continue to find our unique Class A, direct secondary strategy both differentiated and compelling. Madison V is our third consecutive fund to be oversubscribed,” said Madison International founder and president Ron Dickerman in a statement.

“Our success in this latest capital raise underscores our continued ability to source, underwrite and execute on investments which deliver an asymmetric risk/return in the Class A real estate space.”

Madison has deployed approximately 40 percent of the fund’s capital commitments into closed investments, including One California Plaza, a 42-story, Class A office tower in downtown Los Angeles, and the Saks Fifth Avenue retail store in Union Square in San Francisco. International outlays include an investment in Songbird Estates, which controls London’s Canary Wharf, the New Century House office building in Dublin, Ireland and the Statoil Office Complex in Oslo, Norway.

“By utilizing our well-established product sourcing channels, we have already identified a dynamic pipeline of prospective investment opportunities and we anticipate maintaining this pace of activity for the balance of the year,” Dickerman said.

Fund V’s predecessor, the 2011 Fund IV, was also oversubscribed, closing at $510 million versus a target of $400 million. It is now fully invested.

Private equity fundraising had a banner year in 2013 — and all signs point to growing appetite from LPs in 2014.

Graham Winfrey

…“The lower mid-market space is still dominated by this 90-10 phenomenon, which means that 90 percent of the capital is going to 10 percent of the GPs, and the other 90 percent of the GPs are struggling with less certainty as to where their capital will come from.”

At the larger end of the market, however, the improving macro picture has attracted interest from LPs both in Europe and further afield, according to Alan Pardee, managing partner of placement agent Mercury Capital Advisors.

“The intention of US investors to invest in Europe has returned,” he says. “We’re getting questions from Asia and the US about investing in Europe, so there does appear to be a return to focus on Europe. We’ll be launching a couple of European funds in the near term.”

This rebounding investor confidence in Europe stands in stark contrast to sentiment during the two preceding years.

“Two years ago, if one invested in Europe, one wasn’t exactly sure what currency one would end up holding out the other side,” Pardee says. “Those issues are all gone. The economies have, generally speaking, stabilized. That doesn’t mean they’re growing, but we’re no longer worrying about whether somebody is catching a falling knife [if they invest] in Europe.”…

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