Baar-Zug, 4 August 2014
Partners Group, the global private markets investment manager, has completed the secondary purchase of the stakes of 31 exiting investors in Trophy Property Development (Trophy) on behalf of its clients. Trophy is a USD 1 billion China-focused property development program operated by Venator Real Estate Capital Partners (Venator) and is the minority owner of five development projects in China through a partnership with Shui On Land, a Hong Kong Stock Exchange-listed real estate developer. Partners Group is now the second largest investor in Trophy, based on original commitment values.
Trophy was initially formed as a seven-year program by Winnington Capital Limited (Winnington) in 2007 and invested in five development projects in China. After a restructuring in September 2013, Venator replaced Winnington as investment advisor to Trophy's general partner and initiated an asset swap with Shui On Land to exchange Trophy's minority stakes in the five original projects for a majority stake in Taipingqiao 116, a 968,000 sqft residential development located in central Shanghai. The residential project offers a unique opportunity to develop one of the last in-fill sites zoned for residential use in the Xintiandi area of Shanghai, which is one of the most desirable submarkets of that city. Further to the signing of definitive transaction documentation in September 2013, the asset swap transaction is anticipated to close in the third quarter of 2014.
Over the course of the restructuring, the program's advisory board approved a two-year extension to the life of the program to April 2017. To secure a short term liquidity window, a tender offer process was subsequently launched to find a solution for investors seeking an exit from the restructured program. Partners Group was ideally positioned to execute the secondary transaction due to its familiarity with both the Shanghai development and an existing relationship with Venator's management team.
Marc Weiss, Partner and Head Real Estate Secondaries, says: “Partners Group had been monitoring the assets within the overall Trophy portfolio for several years, even before the involvement of Venator. With the program successfully restructured by Venator and a strong management team now in place, Partners Group is pleased to have been able to structure a secondary offer that benefits all parties involved. We look forward to working with Venator going forward to realize the value of the Taipingqiao 116 development.”
Partners Group is one of the most active acquirers of real estate portfolios through secondary transactions and, since the financial crisis, has invested over USD 2.7 billion globally in this area.