KKR, TPG Plan Real-Estate Funds

Mar 14 2013 | 1:24pm ET

Two major private equity firms are set to launch their first dedicated real-estate funds.

Kohlberg Kravis Roberts and TPG Capital Management hope to raise a combined $1.5 billion or more for the funds. Both are gearing up for a fundraising push, with KKR committing a significant amount of firm capital to the new venture and TPG eyeing the second quarter to begin marketing the fund.

TPG’s real-estate fund looks to be the larger of the two, with a target of at least $1 billion—which would make it the second-largest property fund ever, The Wall Street Journal reports. And while TPG will not shy away from traditional real-estate fund strategies, such as buying up distressed properties, it will also seek to take a more private-equity approach to the space, buying whole property companies and large portfolios of buildings.

“We combine sound property capabilities with corporate-style investing, which TPG has significant expertise in,” Kelvin Davis, head of TPG’s real-estate group, told the Journal.

For its part, KKR plans to launch its fund with $500 million in initial capital. The firm has been investing in real estate for two years, but the new fund will be its first investing exclusively in the space.


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