Tokoro Capital launches EUR250m European office fund
Tokoro Capital, a real estate investment manager launched by former Brockton Capital executives, Sanjay Sethi and Max Bassadone, has closed its first Fund, TKO-I LP with EUR100 million in capital commitments.
The Fund was backed by a major European institution and, assuming leverage, has cEUR250 million of investable capital that will initially target office opportunities in London and Paris. The close, which was achieved against the backdrop of the Covid-19 pandemic, underlines the continued appetite amongst investors to deploy capital into real estate and particularly into funds with no legacy assets.
Tokoro Capital will target opportunities in Europe’s gateway cities, employing a relative value strategy to allow it to invest through the cycle whilst seeking to take advantage of pricing dislocation, which is expected to be exaggerated by current market uncertainty. The Fund will initially seek office investments where active asset management is both accretive and defensive of capital value. Target assets will be in the EUR20 million to EUR100 million value range with an initial focus on Paris and London, Europe’s two most liquid and transparent real estate markets, underlining Tokoro Capital’s belief in the important role offices will continue to play for businesses in the future.
Tokoro Capital’s ethos is underpinned by a strong social purpose and includes a clear framework of social incentives for the team, alongside a commitment to channel a proportion of profits towards affecting social change include a commitment to 1% for the planet and providing seed capital as well as advisory expertise to social ventures.
Sanjay Sethi and Max Bassadone have over 30 years combined of real estate experience, having transacted and asset managed over EUR10 billion of real estate across the capital stack, whilst they are also active angel investors in the impact space. Prior to launching Tokoro, they spent four years together at Brockton Capital.
Sanjay Sethi, Co-Managing Partner at Tokoro Capital, says: “As a new GP to the market we have to offer more to LPs than the long roster of established managers out there. We have been prepared to question everything from what our business stands for to compensation models, investment horizons and the formation of investment strategies. We did not raise a fund anticipating distress but we wanted to create a vehicle that could benefit from both periods of stability and volatility in the investment cycle. This is the first of what we hope will be a series of funds across a number of asset classes.”
Max Bassadone, Co-managing Partner at Tokoro Capital, adds: “Our perspective is new and fresh, we work with LPs to develop bespoke investment strategies that meet their needs from an asset allocation perspective as well as risk and reward. We grew up in value add and opportunistic investment environments and thus are active managers at our core and able to generate yield pick up even in lower risk investments.
“We remain steadfast in our conviction that well located, highly amenitised offices offering a carefully curated mix of indoor and outdoor space will continue to be highly sought after, especially as the clear social value of work force interaction becomes apparent and the cycle of living at work is broken. Closing our first fund against the backdrop of the Covid-19 pandemic is a clear endorsement of this strategy and vision.”