Singapore-based asset management firm Paragon Capital Management and real estate fractional investment platform RealVantage have formed a consortium for their inaugural Global Real Estate Alternative and Tactical (Great) Fund, with a target size of US$50 million.
The fund, which completed its first close on May 31 with a 75% subscription volume within a month from launch, is a global private equity (PE) real estate fund that seeks to create a diversified portfolio of real estate investments with an overall target net internal rate of return of 12% to 15% over five years, including a projected 4% to 5% cash yield to be distributed quarterly.
The Great Fund capitalizes on market demand-driven real estate asset classes by leveraging multiple established real estate managers in Asia-Pacific, Australia, the UK and US for investment across equity, mezzanine and debt capital opportunities.
The fund aims to invest in core-plus, value-add and opportunistic real estate asset classes focusing primarily on industrial, logistics, residential, retail, office and hospitality sectors. It also targets build-to-rent, healthcare, student accommodation and elderly care sectors.
As well, the fund plans to allocate investments towards development, upgrading and distressed property opportunities, as well as high-yielding debt opportunities, including senior and mezzanine loans, aiming for a 4% to 5% cash yield. Driven by high interest rates and falling valuation, it aims to also seek out distressed assets, with dislocation in pricing in the office and retail sectors.
Jointly conceived by Paul Lee, Paragon’s co-founder, CEO and CIO, and Keith Ong, RealVantage co-founder, the fund’s investment committee, in addition to the two, also includes Beng Tiong Ng, RealVantage’s chairman, who brings over 30 years of experience in real estate, finance, mergers and acquisition, and governance.
Lee notes: “By optimizing the strengths of both Paragon’s established investment proficiency and RealVantage’s strong operating track record and expertise in the real estate investment space, we are confident in generating robust risk-adjusted returns for our investors.”
