Kildare Partners, the newly-formed private equity firm founded by Lone Star’s former Asian boss Ellis Short, has completed a circa $1.5bn first closing for its maiden real estate opportunity fund and has completed its return maiden investment deal.
CoStar News understands that Short, the billionaire chairman of struggling premier league football club Sunderland A.F.C, has agreed a substantial credit facility with Wells Fargo and has an ambition at Kildare Partners to deploy as much as $10bn in distressed real estate equity in Europe over the next 10 years.
The debut fund, the Kildare Partners Fund 1, has acquired the 47,853 sq ft Park Street in Mayfair (pictured below) for £52.5m from a Danish pension fund advised by Cording Danmerc.
The business plan for the asset is expected centre on improving on the average £55 per sq ft rental income at Park Street, predominantly let to Stora Enso, a Finnish pulp and paper manufacturer, with around two-thirds of the rent roll due for a rent review from 2015.
Kildare Partners received offers of mortgage-secured financing for Park Street from Lloyds Banking Group and Münchener Hypothekenbank, through Laxfield Capital.
However, the private equity fund instead opted to draw on its Wells’ corporate line, at around a 50% LTV effectively priced at a sub 200 basis points margin.
Short’s ambition to return to private equity investment has been well-trailed since May, and in future is expected to focus on bidding for non and sub-performing loan portfolios rather than direct property investment plays.
Kildare Partners is expected to be among the bidders on the upcoming series of IBRC loan portfolios, with an investment focus on commercial and residential property across UK, Ireland and Germany.
IBRC’s Project Evergreen, the corporate loan book, is already in the market and the much-anticipated €7.8bn Project Rock UK property loan portfolio, finally comes to market next week.
Short ran Lone Star’s Asian real estate business for several years until around 2007.
Kildare Partners declined to comment.