Pro-invest: How to Launch a Private Equity Real Estate Fund

Published 26 Aug 2016
Reference 6221
Industry Private Equity
Region Asia
Length 13 page(s)

The case describes how the Pro-invest Group – a boutique investment firm specialising in private equity real estate and real estate asset management – built its business and raised a first-time private equity fund. The Pro-invest founders had boot-strapped the business since its inception in 2013, but in-house funds were running out by mid-2014 and they needed third-party capital to take the venture to the next level. After deciding on a suitable fund structure, the Pro-invest team hits the fundraising trail. Turmoil erupts when a potential investor pulls out at the last minute, leaving the team in shock to re-evaluate its fundraising options. The case explores the pros and cons of each option in detail.

Teaching objectives

The case allows students to evaluate the different options when creating a new fund, and more generally to understand the fundraising options available for PE funds, especially first time funds. They should be able to: 1. Understand the central elements (e.g. control, economics) that private equity fund managers consider when raising capital. 2. Gain insight into the fundraising dynamics in the real estate private equity industry. 3. Step into the shoes of a fund manager’s Management Committee and evaluate the pros and cons of the various fundraising options, from institutional investors to family offices. 4. Appreciate the questions and due diligence requirements of large institutional investors before allocating funds to a real estate PE fund. 5. Appreciate the challenges of balancing the efforts of fundraising and executing investments in parallel, in particular when raising a first-time fund.

  • Private equity
  • Real estate
  • Fundraising
  • Australia
  • Hotel industry
  • First-time fund
  • Fund structure
  • Global Financial Crisis
  • PERE
  • Family office
  • Q41516
  • GPEI
  • GPEI-Case
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