Patron Capital Readies £800M War Chest

One of the best-regarded opportunity fund managers in Europe is close to completing a capital raising that will give it more than £800M to spend in the pandemic-afflicted European property market.

Patron Capital has raised €770M (£699M) for its sixth European opportunity fund, PERE reported. The fund has a target of €900M (£816M) and a potential hard cap of €1B (£907M). 

PERE said the firm has only invested €6M (£5.4M) of the money raised so far, giving it almost the entire pot to invest in markets that are likely to see significant dislocation as a result of the impact of the coronavirus. 

Patron is run by Keith Breslauer, and has a good track record of performance; since the financial crisis, the firm has produced an internal rate of return of 20% and an equity multiple of 1.75 times.

The fund will principally look to invest in the UK and western Europe, and invest mainly in office, retail, hospitality and healthcare.

In the UK, Patron is in the process of building a £120M mixed-use scheme in Brighton in partnership with residential developer First Base, comprising 110K SF of offices, 168 homes for sale and build for rent, and 40K SF of leisure space. 

In recent years in the UK it is best known for large corporate deals. In 2013 it bought housebuilder Cala Homes in a joint venture with Legal & General, before selling its stake to L&G in 2018. 

And in 2017 it bought pub company Punch Taverns for £1.8B in a joint venture with brewer Heineken. 

Other investors currently in the market raising opportunity funds for Europe include StepStone Real Estate, Bain Capital, AIG and Harrison Street.