AFR Street Talk 26 September, 2022

Real estate fund manager Valore eyes $1bn for new fund

Busy Melbourne property developer Ross Pelligra is opening his contact book and deal pipeline for real estate fund manager Valore Investment Partners, as it hits the fundraising trail with its first fund.

Melbourne family-owned developer Pelligra Group’s Ross Pelligra loves Adelaide assets. Valore kicked off cornerstone soundings for a $250 million initial raise for the ‘Valore Opportunity Fund’, telling high-net-worth investors it is targeting a $1 billion fund size.

The fund wants to be a co-investor with third-generation property investor Pelligra Group in commercial real estate assets (industrial, office, retail, hotels and apartments) across Australia and New Zealand. The goal is to make a 10 per cent annualised return – playing on either the equity side or the debt side, though not as the senior lender.

It’s gunning for refurbishments, conversions and distressed/discounted assets, according to the investor deck. And it’s keeping an ear to the ground for emerging income-generating assets like data centres, build-to-rent and medical centres.

Valore is a new name in real estate circles, but the people behind it are well known. It was set up in 2021 by ex-Macquarie executive director Peter Wright, who later founded a renewable energy development business CEP.Energy – via which he met the Pelligra team.

Valore’s ownership is split across Wright (via non-bank lender NBFI Capital), Pelligra Group and Pelligra-backed asset manager Citinova. Of course a big drawcard would be Pelligra Group’s deep pockets and access to juicy real estate deals.

The third-generation property business has invested billions in 1200-odd assets across its 60-year history. Recently, it has branched out from its stomping ground of industrial assets into commercial and hospitality deals - usually with the firm’s own money.

Pelligra’s $60 million-plus Holiday Inn in Adelaide’s Mawson Lakes is one of the assets in Valore’s pipeline. Others include a $105 million luxury apartment development at Adelaide’s busy Rundle Street, a marina at Queensland’s Main Beach, and a Mercado hotel in Byron Bay.

For the deals that Valore goes ahead with, the fund plans to inject up to 70 per cent of the asset value and bring in partners and third-party debt for the rest.