Australian alternative asset manager MA Financial is launching an A$1-billion ($675 million) real estate investment vehicle with support from US private equity giant Warburg Pincus, according to an announcement on Thursday.
According to a company statement, Warburg Pincus will facilitate offers to certain funds they manage that have already expressed interest in investing in these notes issued by the real estate investment vehicle. MA Financial will manage the vehicle and co-invest in it via equity and notes in an amount representative of 2% of the total capital, up to A$20 million.
The vehicle is expected to provide global institutional investors access to Australia’s real estate credit market, funding high-quality developers and residential real estate projects.
An institutional investor will have the opportunity to participate in the vehicle through the issuance of notes, with the first note issuance anticipated to take place by the first close by December 31, 2024. The vehicle has an initial target of at least A$700 million in commitments for the first close, which is inclusive of MA Financial’s co-investment.
According to the facilitation agreement, Warburg Pincus will be granted options to acquire up to 2.5 million shares of MA Financial once the vehicle achieves a target of approximately A$500 million, as well as options to acquire another 2.5 million shares upon achieving a target of approximately A$1 billion, at a strike price of A$6.
The options can only be exercised after a minimum of two years following the first close and before the winding up of the vehicle, the release added.
“The nature of this initiative provides institutional investors with the combined expertise and track record of MA Financial and Warburg Pincus. Warburg Pincus’s track record of partnering with management teams to build out strategies is an exciting development for MA,” said MA Financial managing director and head of global partnerships Anthony Habis.