Paragon Capital Management, a Singapore-based asset management firm, and RealVantage, a real estate fractional investment platform, have formed a consortium for a new real estate-focused private equity fund.
The fund, named the Global Real Estate Alternative and Tactical Fund (Great), has a target fund size of US$50 million ($67.6 million). It completed its first close on May 31 with a 75% subscription volume within a month of its launch.
The Great Fund is jointly conceived by Paul Lee, co-founder, CEO & CIO of Paragon Capital Management, and Keith Ong, co-founder and CEO of RealVantage. The fund’s investment committee comprises both Lee and Ong, along with Beng Tiong Ng, chairman of RealVantage who brings over 30 years of experience in real estate, finance, M&A and governance.
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The Great Fund will be a diversified portfolio of real estate investment with an overall target net internal rate of return of 12%–15% over five years, including a projected 4%–5% cash yield to be distributed quarterly.
It 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.
Driven by high interest rates and falling valuation, the Great Fund aims to also seek out distressed assets, with dislocation in pricing in the office and retail sectors. It will leverage multiple established real estate managers in Asia Pacific, Australia, the UK and the US for investment across equity, mezzanine and debt capital opportunities.