Private equity investment manager BLG Capital said it has raised a total of €152 mln of equity at the final close of its second opportunity fund following strong demand from US and European institutional investors.
Private equity investment manager BLG Capital said it has raised a total of €152 mln of equity at the final close of its second opportunity fund following strong demand from US and European institutional investors.
The largest of the three initial investments by the new fund is its co-investment with Dogu Holding in Galataport. The redevelopment of Istanbul’s longest waterfront site on the Bosphorus, and the only passenger cruise ship port, will add a high street shopping district, office space, the new luxury Peninsula Hotel Istanbul, and other leisure and cultural attractions.
'This successful capital raise highlights how existing and new investors regard Turkey as an attractive long-term growth market for real estate investment, especially with the fund’s exposure to iconic projects such as Galataport,' said Serdar Bilgili, BLG Capital’s chairman. 'It demonstrates their confidence in our track record of completing complex redevelopments to world class standards to create significant value over the medium to long term.'
BLG Turkish Real Estate Fund II (BLG TREF II) received 70% of its equity commitments from US institutions with the balance mainly from Europe and the Middle East. The profile of its investors encompasses endowments, pension funds, insurance companies, foundations and fund of funds.
Alongside the Galataport project, BLG also completed two other investments on behalf of the fund, VK 108 – a luxury residential high-rise development in the heart of the prime shopping district of central Istanbul, and Bodrum – a mixed-use hotel and residential development on a seafront site.
BLG Capital said it has 'a strong pipeline of other investment opportunities for the fund'. 'Difficulties faced by Turkey’s real estate sector have caused a pick-up in the number of distressed situations and a shortage of capital for prime development projects, which present highly attractive investment opportunities for BLG Capital,' the company said.
BLG TREF II is continuing the opportunistic investment strategy of its predecessor 2012 vintage fund, which has fully deployed the €142 mln of equity that it raised in six investments. Its assets include Ortakoy, Cakmakli and Florya Aparts - premium student accommodations in Istanbul operated by Republika Academic Aparts; the Palazzo Corpi, a redevelopment of the iconic former US Consulate building in Istanbul that is now operated by the Soho House members’ club and hotel group; and additional transactions across Istanbul and Turkey.
Lazard acted as the global placement agent for BLG TREF II, while Macfarlanes was the fund’s legal counsel.