Paragon Capital Management, an asset management firm headquartered in Singapore, together with RealVantage, an Asian regulated real estate fractional investment platform, have announced the formation of a consortium for an inaugural global real estate alternative and tactical (GREAT) fund.
The fund is a global private equity real estate fund that seeks to create a diversified portfolio of real estate investments with an overall target net internal rate of return of 12-15% over 5 years, including a projected 4-5% cash yield to be distributed quarterly.
It has a target size of $50m, and completed its first close on 31 May 2024 with a 75% subscription volume within a month from launch, according to a joint press release by teh two firms.
The GREAT 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.
Furthermore, the fund plans to allocate investments towards development, upgrading and distressed property opportunities, as well as high-yielding debt, including senior and mezzanine loans, aiming for a 4-5% cash yield.
It will use “multiple established real estate managers” in Asia Pacific, Australia, the UK and US for investment across equity, mezzanine and debt capital opportunities.
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, as well as Beng Tiong Ng, chairman of RealVantage.
“Real estate is a proven asset class that continues to outperform and provides growth opportunities as part of diversification,” said Lee.
“Despite a challenging fundraising environment, Paragon Capital Management and RealVantage have been able to raise capital for the GREAT fund within a matter of weeks,” added Ong.