Madison Closes Largest International Fund, Exceeds Target

Madison International Realty closed its Liquidity Fund VI with $1.4 billion in equity commitments.

By Gail Kalinoski

Ronald Dickerman, Madison International Realty
Ronald Dickerman, Madison International Realty

New York—With an expanded diverse institutional investor base, Madison International Realty has closed its largest fund with $1.39 billion in equity commitments, well above its $950 million target.

Ronald Dickerman, Madison’s founder & president, said the global roster of institutional investors for Madison International Real Estate Liquidity Fund VI LP included endowments, foundations, public and private pension funds, sovereign wealth funds, family offices, insurance companies and high net worth individuals from Europe, Asia, the Middle East, Australia and the U.S. The fund launched in March 2015.

“The success of the Fund VI capital raise demonstrates the confidence investors have placed in Madison’s highly differentiated direct secondary investment strategy, which targets ownership stakes in prime commercial properties and portfolios in capital cities of the U.S., U.K., and Western Europe,” Dickerman said in a statement. “Our strategy is proven to produce asymmetric returns in numerous economic cycles, with minimal volatility.”

Dickerman added that the real estate private equity firm believes its “strategy is counter-cyclical during periods of economic uncertainty. With Fund VI, we executed a global fund raise and received robust and broad support from current and new investors.”

The firm, which has offices in New York, London and Frankfurt, Germany, specializes in acquiring ownership stakes, joint venture, private REIT and listed property shares in prime properties and portfolios in its target markets. It also provides joint venture equity to owners, sponsors and investors who are seeking to monetize existing equity positions, restructure balance sheets, or to replace existing capital partners.

“Our strategy allows owners and sponsors to monetize embedded equity without requiring a sale of their properties,” Dickerman noted. “The volatility of the market has created opportunities for us, with Madison deploying some $700 million of equity over the past year.”

Madison Fund VI has already deployed about $400 million in prime investments in the past year, including the acquisition in March of an ownership stake in 550 Kearny St. in San Francisco. The fund paid $103.7 million to Brickman Real Estate to become a co-owner of the 10-story, 194,000-square-foot office building in the city’s Financial District.

In December, the fund acquired a 35.4 percent stake in St. Stephen’s Green Shopping Centre, a 230,000-square-foot shopping center in Dublin from Irish Life Assurance plc for $66 million. The center, located in the city’s Grafton Street retail corridor, opened in 1988 and has three levels of shopping and one of the largest parking facilities in Dublin.

The fund also made two separate investments in HBS Global Properties, Hudson Bay Co.’s real estate joint venture with Simon Property Group. The first was made in November, when Madison was one of three third-party investors in the JV’s equity with a $150 million investment. In March, HBC announced it sold an additional $50 million of its equity in HBS Global Properties to Madison International Realty.