Warburg Pincus and Madison International Realty have announced a $300 million strategic partnership aimed at capitalizing on opportunities in the real estate secondaries market. The collaboration will focus on making investments in sectors such as data centers, industrial, cold storage, and residential housing, using liquidity solutions to access value at what both firms consider favorable discounts.
José Arredondo, Principal at Warburg Pincus, stated: "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, commented: "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."
The announcement comes during a period marked by tight liquidity conditions due to rising interest rates. This has made commercial real estate transactions more challenging across major markets including the US, UK, and mainland Europe. In response to these conditions, secondary market transactions have become an alternative way for Limited Partners to obtain liquidity from existing investments without relying on primary market activity. As a result, the secondaries market has expanded significantly and is now considered an established part of real estate private equity investing.
Madison International Realty has operated as a provider of liquidity solutions for over 20 years. The firm has raised more than $8 billion from over 175 institutional investors globally since its inception. Warburg Pincus is recognized as a global private equity firm with more than $117 billion invested in over 1,000 companies worldwide through its various strategies.
Madison International Realty operates internationally with offices in cities such as New York, Los Angeles, London, Frankfurt, Luxembourg, Amsterdam, Singapore, and Seoul (www.madisonint.com). Warburg Pincus manages assets exceeding $85 billion with an active portfolio spanning more than 215 companies across different stages and sectors (www.warburgpincus.com).