Warburg Pincus & Madison form €277m real estate partnership

Private equity firm Warburg Pincus and real estate secondaries specialist Madison International Realty have announced a new $300 mln (€277.1 mln) strategic partnership. 

José Arredondo and Ronald Dickerman

This collaboration, funded by Warburg Pincus's $4 bn (€3.69 bn) Capital Solutions Founders Fund, establishes a dedicated vehicle for the two firms to invest together in the real estate secondaries market.
Warburg Pincus, a major private equity firm with $85 billion under management, and Madison International Realty, a leading real estate secondaries specialist, have announced a new $300 million strategic partnership. This collaboration, funded by Warburg Pincus's $4 billion Capital Solutions Founders Fund, establishes a dedicated vehicle for the two firms to invest together in the real estate secondaries market.
Madison is recognized as a global leader in providing liquidity solutions across various real estate assets, including individual properties, portfolios, and platforms. They hold a strong position in the real estate secondaries market and benefit from a steady stream of deals, especially in the current environment where liquidity is limited. Warburg Pincus sees this expanding segment of the real estate market as a compelling fit for its capital solutions strategy and has chosen Madison as an ideal partner for this endeavour.
The partnership will concentrate on unique real estate investments, leveraging liquidity solutions to find value in desirable asset classes such as data centres, industrial properties, cold storage, and residential housing. The firms aim to acquire these assets at what they believe are attractive discounts to their underlying value, with a commitment to delivering strong risk-adjusted returns to their investors.
José Arredondo, principal, Warburg Pincus, said: “We believe the real estate secondaries market represents a compelling opportunity at a time when liquidity is increasingly constrained. We are pleased to partner with Madison, a leading industry player for over two decades, and believe that our combined expertise, network and resources in the real estate sector will create a compelling and valuable partnership for growth.” 
Ronald Dickerman, founder and president of Madison International Realty, added: “We are excited to form this strategic partnership with Warburg Pincus, the foremost name in private growth equity investing globally. We believe this strategic partnership will allow us to enhance our dynamic liquidity solutions based positioning in the real estate market at exactly the time global investors seek them most. Warburg Pincus recognizes the strength of our secondaries sourcing platform, the differentiation of our liquidity solutions-focused investment strategy, and Madison’s access to compelling real estate opportunities in this capital constrained environment.”