Brazilian Real Estate
Venture capital and private equity manager Brazilian Real Estate Investments (BREI) is forming its first fund around one of the country’s largest real estate developers, and expects to attract BRL 200 million in investment through September, the company’s founder and CEO told DealWatch.
Opened in January of this year, BREI has developed its first fund (FIP BKO 1) around commercial and residential real estate developer BKO Incorporadora. Founded in 1986, BKO is one of the largest developers in Sao Paulo state.
The fund was under initial approval review by Brazil’s Securities Commission (CVM) in July, and should open in August to investors, with the goal of raising BRL200 million over two months, said Vitor Bidetti in a recent interview.
“With this fund we will invest in real estate projects with BKO as a partner,” said Bidetti, who has worked since 1991 in local banking and investment firms, including BankBoston, Interservicer and Brazilian Finance & Real Estate.
“With our professional background at BREI, we can be considered expert evaluators of Brazil’s realty market.”
Real estate is one of the few markets in Brazil in which Bidetti says a clear and reliable growth rate can be forecasted for the next few years.
Real estate credit currently represents around 8.5% of GDP in Brazil, but BREI expects that to reach 16% by 2020, and stabilize around 16.5% after, he said.
“That range would make sense for a country of Brazil’s profile,” Bidetti added. “This growth will push the Brazilian real estate market forward in the coming years.”
Two to three other fund concepts are in development by BREI, and could be implemented as soon as next year following the successful funding of FIP BKO 1, Bidetti said.
One would be focused on mortgage-backed securities, with the other a potential “fund of funds,” he added.