The Funds will focus on making opportunistic and value-oriented investments in undervalued and typically liquidity constrained property assets, loans and corporate entities with substantial underlying property value, predominantly in Western Europe. Patron focuses on identifying and unlocking inherent value through investment in a broad range of deal types in which it generally can acquire a controlling stake or structure substantial control over the investment outcome. Patron has a long track record of building value through the repositioning, redevelopment and intensive management of real estate assets and operational improvement of corporate entities and of successfully realising this value at exit.
Property assets may be undervalued in circumstances where the seller is experiencing severe liquidity constraints and/or has other commercial or regulatory pressure to sell troubled or non-core assets within a limited period of time. There may also be lack of effective competition due to a shortage of specific expertise in the local markets combined with a lack of well-capitalised buyers who have the capacity to execute in the required time frame. The assets themselves may be distressed due to economic and market conditions, specific business situations or lack of capital and adequate management. They may also be undervalued due to lack of information or relevant transparency or sector disfavour. While undervalued or liquidity constrained, the properties may have other compelling attributes and fundamentals, such as location, strong potential supply/demand characteristics or a unique, competitive market position upon which Patron, as an experienced investor and manager, can capitalise. Patron's large team, broad skill-set and extensive experience enables it to understand, invest in and manage corporate, debt-related and other complex and unusual transactions that have real estate as core to their ultimate intrinsic value.
The Funds will focus on middle-market transactions that typically require equity commitments in the range of €30 million to €90 million. The Fund may also opportunistically invest in particularly attractive larger transactions consistent with its investment strategy and which meet its return objectives. The Fund will aim to invest in non-competitive situations, originated through an extensive network of long-standing relationships with local participants, financial institutions, investment banks, private equity partners, local advisers and agents.
The Funds' objective is to generate superior, absolute and risk-adjusted returns through a diversified portfolio of acquisitions. Investments are targeted with the aim of generating a 17% to 22% gross IRR and a 1.7x + gross equity multiple on invested capital over a three to five year investment horizon.