Private equity real estate

About pere

Private equity real estate (“PERE”) is an investable asset class that consists of debt and equity investments in the property markets. PERE gained its popularity since 2000 when there are more institutional Investors started investing into this asset class.

Investing in PERE requires, among other things, a longer term consideration, an active management strategy, and a significant upfront capital commitment. It has the potential to offer stable income returns with strong capital appreciation in the long run.

Unlike REITs, PERE is not affected by the volatility of the stock market. While REITs may be a lucrative investments, they are highly correlated to the stock market. During market downturns, REITs can be seriously impacted by events that have no relation whatsoever with real estate fundamentals.

With its high expected returns and low volatility, PERE is an asset class that can offer a better risk-adjusted return when added to a stock and bond only portfolio.

Senturia Capital comprised of a team of experienced professionals with broad expertise necessary to execute on multiple PERE's investment strategies, including core, core-plus, value-added and opportunistic investments.

Investment approach

We adopt an active approach when making investments which:

Emphasizes on strategically located real estate assets with institutional quality potential.

Invests in real estate assets which generate significant cash flow and residual value enhancement potential through creative and aggressive asset management.

Targets to acquire distressed real estates at a substantial discount and/or below their current market value.

Grows the real estate assets portfolio based on rigorous analyses of actual value and conservative projections of investment opportunities.

Explores regional opportunities through established local partners who have access to proprietary transaction flow.

Investment Strategy

We follow core, core-plus, value added, or opportunistic strategies when making investments. We will invest 80% of our funds in core or core-plus real estates, 15% in value-added real estates and 5% in opportunistic real estates.

Core

Typical IRR

6%
To
10%

Risk: Low

Core real estates are the bedrock of a diversified portfolio. Core investments are almost as safe as bonds, but with much higher returns. Unlike the stock market, core investments hold up extremely well in business cycle downturns. Core investments use the most conservative leverage and invest in the least risky assets.

Core-plus

Typical IRR

8%
To
12%

Risk: Low to moderate

Core-plus real estates are similar to core, but not quite as high quality. The properties might be in the suburbs, or a secondary metropolitan area. The tenants may not be as high quality, and may not have rental guarantee from reputable companies. Core plus investments are low to moderate risk, with returns slightly more than core.

Value-added

Typical IRR

10%
To
15%

Risk: Moderate to high

Value-added investments involve acquiring moderately distressed real estates at a lower price, improve the assets and flip for a healthy profit. Value-added investments typically target real estates that exhibit management or operational problems, require physical improvement, and/or suffer from capital constraints.

Opportunistic

Typical IRR

12%
To
20%

Risk: High

Opportunistic investments target vacant lands that can be developed into commercial, industrial and residential real estates.

Senturia Real Estate Investment Fund

The Fund has been established to provide Investors with an investment exposure to the private equity real estate investment class. The key features of the Fund are as below:

Fund size
MYR 200,000,000
Minimum subscription
MYR 2,000,000
Term of the fund
8 years
Investment focus
Core or Core-plus 80% Value-added 15% Opportunistic 5%
Geographical focus
Primarily invest in Malaysia, Singapore, China and Australia.
Target portfolio size
10 to 15 investments
Management fee
2.0% per annum
Preferred rate
8.0% per annum
Legal structure
Labuan offshore limited partnership company