Warburg Pincus, a leading global private equity investor with $85 billion AUM, and Madison International Realty (“Madison”), a leading real estate secondaries firm, today announced the formation of a $300 million strategic investment partnership. The investment from Warburg Pincus through its $4 billion Warburg Pincus Capital Solutions Founders Fund, creates a dedicated vehicle for the two firms to partner and transact in the real estate secondaries market.
Madison is a global industry leader in liquidity solutions across the real estate spectrum including properties, portfolios, and platforms. The firm enjoys sustained market positioning in real estate secondaries and possesses robust deal flow in a liquidity constrained market environment. Warburg Pincus has targeted this growing segment of the real estate market as compelling for its capital solutions strategy and has identified Madison as a best-in-class partner to pursue this strategy.
The partnership will focus on effectuating differentiated real estate investments, utilizing liquidity solutions to access value in preferred real estate asset classes such as data centers, industrial, cold storage, residential/ housing and other sectors at what the partners believe to be attractive discounts to underwritten real estate value. Warburg Pincus and Madison are committed to delivering strong risk adjusted performance to their investors.
“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,” said José Arredondo, Principal, Warburg Pincus.
“We are excited to form this strategic partnership with Warburg Pincus, the foremost name in private growth equity investing globally,” said Ronald Dickerman, founder and President of Madison International Realty. “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.”
Amid challenging liquidity conditions shaped by rising interest rates, the mid 2020s have yielded a challenging environment for commercial real estate transactions across the US, UK, and mainland Europe. As market participants look to access capital, secondary market transactions offer a creative, innovative way for Limited Partners to unlock value from their existing investments—providing much-needed liquidity and returns while bypassing traditional primary market activity. As conditions continue to evolve, the secondaries market has grown considerably and become a permanent fixture in the investment life cycle of real estate private equity.
Over its 20+ year history as a liquidity solutions provider, Madison has thrived in times of market volatility, and has established itself as a pioneer in the real estate direct secondaries investment market. Since inception, Madison has raised over $8 billion in capital commitments from more than 175 institutional investors around the world. Warburg Pincus is a leading global private equity firm and has invested more than $117 billion in over 1,000 companies globally across its private equity, real estate, and capital solutions strategies.
