TPG Capital seeks US$2b for first multi-investor property fund

TPG Capital, the US private-equity firm that formed a real estate division after the credit crisis, is trying to raise as much as US$2 billion for its first multi-investor property fund.

The firm, whose real estate unit was founded by Kelvin Davis, a senior partner, has begun soliciting pledges for the new fund, according to investor presentation documents and two people with knowledge of the situation.

TPG is among private-equity firms that have been chasing distressed real estate assets since the American housing market collapse and Europe's economic crisis depressed commercial property values worldwide. The company, based in Fort Worth, Texas, is seeking to take advantage of investor appetite for real estate at a time of low rates on fixed-income assets.

TPG's property investments since 2009 were ultimately bundled into an investment vehicle called TPG Real Estate I, and the new fund is known as TPGRE II, according to the 60-page presentation to prospective investors.

TPGRE I contains 10 deals representing US$2.3 billion of equity that came from the firm's main buyout funds and separate accounts with institutional clients such as New Jersey's state pension fund and Ivanhoe Cambridge, the real estate arm of the Canadian pension fund Caisse de Depot et Placement du Quebec.

Deals in TPGRE I include stakes in North American homebuilder Taylor Morrison Home, Catellus Development, office landlord Parkway Properties and European warehouses. The firm also owns office buildings in London and Silicon Valley.