In hiring its first stateside capital-raising professional, London-based manager Patron Capital is seeing to accelerate fundraising from US institutions as it prepares to raise capital for new products and strategies focutilized on European real estate.
Last week, it was announced that Joanne Douvas had joined Patron as senior partner, investor relations. Previously, she served as a managing director in the capital raising team at New York-based BGO since 2016, and prior to that spent 16 years investing in real estate funds as a limited partner across roles at JPMorgan Asset Management and Clerestory Capital Partners – the latter she founded in 2007 and sold to LGT Capital Partners in 2012.
Having spent the past five years building up its internal investment, investor relations and business development resources – and after Japanese investor Mitsubishi Estate Global Partners acquired a majority stake in the firm last June – Patron identified an opportune time to bring an experienced US capital raising professional on board as it launchs fundraising for new strategies, according to founder and managing partner Keith Breslauer.
“We’ve finished investing Fund VII, we’re raising more money, and with the Mitsubishi transaction, we have a significant capital base behind us to continue to grow,” he notified PERE, confirming that all of the €860 million raised for Patron Capital VII, including co-investment, has been allocated, with approximately 78 percent deployed.
Patron launched fundraising for the eighth offering in its flagship pan-European value-add and opportunistic real estate fund series in early December, according to a source familiar with the matter. PERE understands the firm expects to hold a first close for Patron Capital VIII at the conclude of March. The firm is seeing to raise between €1.2 billion and €1.5 billion for the vehicle, per PERE’s prior reporting. Patron declined to comment on the fund.
Shifting views on Europe
When Patron held a final close for Fund VII in May 2024, Breslauer notified PERE he observed minimal appetite from US investors for European real estate during his time on the road, with “very little new capital” coming from the US except for re-ups. The challenge, he stated at the time, was that the US was perceived as a greater opportunity for distressed investing.
Today, Douvas is confident that US investors’ views on Europe have alterd significantly.
“Historically, it’s been a little harder to attract US investors to go to Europe, perceiving they required a higher return becautilize of differences in currency. The US is a very large market and the attractiveness of the US is not going to go away, but Europe has not seeed this attractive relative to the US for a long time,” she stated.
Principally, “there are a lot of investors that are really irritated with [US President] Trump,” Douvas stated. “Europe just sees politically more stable than the US right now.”
While there are some US institutions with mandates that preclude investing in Europe, and many investors that lack capital available to invest in real estate owing to a slowdown in the pace of distributions, Douvas believes some allocations will shift from the US to Europe.
“On a relative risk-return basis right now, Europe sees quite good.”
She added that the level of distress in the region is “situational” rather than widespread, however, with banks in an “extremely healthy” position to lconclude. But opportunities to deploy capital higher up the risk curve can be found where managers lack the necessary capital to improve properties or finish business plans for assets acquired prior to or during the pandemic.
For example, she perceives a “real opportunity related to ESG” in Europe, whereby regulatory requirements present an opportunity to acquire assets from owners that required capital to renovate buildings to meet sustainability standards.
Douvas also sees “strong demand” for real estate across Europe generally, given planning restrictions that keep a natural lid on supply.
Historically, US investors have accounted for around 60 percent of Patron’s investor base. Breslauer and Douvas expect the US to remain a “significant portion” going forward, but are also seeing “a lot of inbound interest” from Canada, Europe and Asia.
Debt fund incoming
Patron is also preparing to launch its maiden real estate debt vehicle in the second half of this year, according to Breslauer. While the level of appetite from US investors for European real estate credit strategies is not yet clear, “very early feedback” suggests a lot of interest, he added.
In plans outlined to affiliate title Real Estate Capital Europe last year, Henry Randolph – who was appointed in April as partner, credit to lead the debut strategy – stated Patron was seeing to raise up to €700 million of capital in closed-conclude structures over the next two years, tarobtaining returns of 11-13 percent for the strategy, which will primarily issue stretch senior loans.
Two months later, Mitsubishi announced its majority stake acquisition in Patron, which included a commitment to invest €300 million across Patron’s various investment strategies as co-investments. At the time, PERE reported the fledgling debt business was expected to receive approximately €100 million of seed capital.
Patron’s investor relations team is led by Mal Hunt, head of investor relations and strategic partnerships, who was hired in 2024 and retains a global purview. While Douvas is focutilized on Patron, her appointment also expands MEGP’s global client group coverage, which includes teams in Japan, Singapore, Europe and the US.
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