Real Estate Fund Assembles Brazil JV

GoldenTree InSite Partners, a New York-based real estate investment fund affiliated with the eponymous asset management firm, plans to deploy BRL400m in equity as part of a new joint venture with LDI, a local Brazilian investment company specializing in real estate. LDI, which is committing BRL44m to the JV, has a track record in high-end Sao Paulo residential, and the new project will be focused on that geography, says the company. “We’re targeting [annualized] IRR returns in the mid to high 20s,” says Ed McDowell, a principal at GoldenTree InSite, referring to returns for an individual project. A typical timeframe for the investment and return is 3.5-5.0 years, he adds. The total sale value of the planned JV is some BRL2.0bn. GoldenTree says it has committed $300m in equity to Brazil over the past two years, including several in residential high rises in the Sao Paulo area. GoldenTree InSite has $1.1bn worth of equity in real estate, while GoldenTree Asset Management manages $14.3bn. GoldenTree joins a herd of investors piling into Brazilian real estate, lured by a compression trade based on improving macro fundamentals and falling interest rates.