Firm celebrates the five-year anniversary of Clarion Partners Real Estate Income Fund Inc.
Franklin Templeton and its specialist investment manager, Clarion Partners, are celebrating the five-year anniversary of the Clarion Partners Real Estate Income Fund Inc. (CPREX), a closed-end tender offer fund that provides individual investors with access to institutional-quality private real estate. CPREX invests in stable, well-leased, cash flow-producing properties in U.S. markets with favorable growth prospects. Industrial warehouse, rental housing and healthcare-related properties comprise 89% of the portfolio.
The five-year milestone signifies Clarion’s commitment to pursuing strategic investment opportunities in commercial real estate even in today’s uncertain environment. Its positive outlook for this asset class is driven by both near-term factors related to moderating inflation, slightly lower interest rates and the direction of certain capital market indicators, as well as long-term trends related to demographics, innovation and shifting globalization.
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“Franklin Templeton and Clarion Partners are grateful for the trust and confidence our many distribution partners, advisors, RIAs and bankers have placed in CPREX,” said Dave Donahoo. “By not charging an incentive fee, similar to our institutional core offering, we have more leverage flexibility and can deliver a larger percentage of gross returns to our investors.”
“Thanks to our partners, we’ve continued to experience net inflows during a period of slow real estate fundraising for the sector as a whole. This has afforded us the ability to acquire new properties during a wider cap rate environment, providing diversification benefits and setting CPREX up to continue to deliver against our investment mandate for the next five years,” said Jeff Masom.
Clarion Partners, CPREX’s sub-adviser, has been a leader in building and managing private real estate portfolios for some of the world’s largest institutional investors for over 40 years; it has more than $74 billion in real estate assets under management as of June 30, 2024.
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“Since the fund’s inception in 2019, we’ve taken a disciplined investment approach, grounded in in-depth research and focused on constructing a portfolio for our investors that generates a balance of income and long-term capital appreciation through investment in real estate sectors and geographies that we believe are poised to benefit the most from long-term macro-economic trends,” said Rick Schaupp. “CPREX is designed to make investments in both real estate private equity and private debt. That positions us to be active investors regardless of where we are in a market cycle.”
Growing interest in alternative investments
Clarion is part of Franklin Templeton’s alternatives business, which spans a broad range of strategies, including real estate, private credit, hedge funds and secondary private equity and co-investments, amounting to approximately 16% of the firm’s $1.65 trillion in assets under management as of June 30, 2024.
There’s evidence of growing interest in alternative investments among individual investors. While in 2016 there were $110.6 billion in U.S. registered funds that invest in private equity, private credit and real estate, that number has nearly tripled, growing to $299.3 billion in 2023, according to Cerulli Associates.
“A confluence of events has helped fuel the adoption of alternative investments, including volatility in public markets and rising demand for returns that are uncorrelated with traditional stocks and bonds,” said Franklin Templeton’s Donahoo. “Technology and product innovation are making alternatives more adoptable and accessible to wealth investors across the globe. Alternatives by Franklin Templeton is uniquely positioned to be a leading solutions provider as this trend accelerates, driven by our deep knowledge of the wealth channel and strong line-up of managers.”
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