A group of investors led by a family office are raising a $30 million fund to allow Brazilians to tap into the US real estate market in the fast-growing Sun Belt.
(Bloomberg) — A group of investors led by a family office are raising a $30 million fund to allow Brazilians to tap into the US real estate market in the fast-growing Sun Belt.
Thiago Pestana, who manages money at Pestana Capital out of Miami, has teamed up with Cesar Viana and his SuccessPar real estate firm to create the fund, which is open to onshore and offshore investors through a Bahamas-based structure.
Named SP2 Investments, the partnership will deploy the money by providing mortgages, buying homes in foreclosure at auction for resale, and the construction of multifamily units and other properties, Pestana and Viana said in an interview.
“There are people who aren’t getting access to credit but are good clients,” Pestana said. “We’re giving loans to those people, who have large savings and income and for one reason or another aren’t able to access credit in the US.”
With the migration of Americans from places like New York, Chicago and San Francisco to the US South — including Florida and Texas — investors as far away as Brazil are being drawn to the opportunity to cash in on continued appreciation of property prices. Investors in the SP2 Investments fund should expect to get annual returns of about 10% in dollars after fees, Pestana said.
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Pestana has already given about 42 loans to individuals to buy property in the US. Banco do Brasil Americas will provide some funding and would hold some loans as guarantees.
Part of the money is coming from Pestana Capital, the family office, and the partners recently met with dozens of potential investors in Brazil to introduce the fund. The first raise is too small for some large funds and family offices, which may deploy capital later after seeing the initial results, they said.
Pestana is the son of Eneas Pestana, former chief executive officer of Brazilian retailer Grupo Pao de Acucar. He previously worked at Banco Safra and started a drink distribution business that he sold before founding the investment firm.
“A lot of families and investors were investing in US real estate in the wrong way, by buying a house in Orlando for example to rent, and accounts never balanced,” Viana said. “We’re offering a professional real estate play.”
(Adds biographical details in penultimate paragraph. A previous version corrected location of offshore structure.)
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