Toronto-based Windsor Private Capital, a merchant bank with a 28-year history of lending to developers and real estate projects, is launching its Windsor Real Estate Opportunity Fund.

Its first fund in the sector will focus on opportunistic acquisitions and distressed real estate assets in the Greater Toronto and Greater Golden Horseshoe areas in Ontario. Initially financed with $150 million in equity, it has been created in partnership with the LiUNA Pension Fund of Central and Eastern Canada.

“I think it was a natural transition for Windsor, which has been working in real estate with a lot of our clients. A lot of our bridge financing, a lot of our loans are with real estate firms,” said Windsor Group partner Steve Kozik in an interview with RENX.

“We do take equity pieces in the real estate sector with quite a few developers.”

Opportunity fund managers

The fund will be managed by Windsor’s senior managers and Marco Di Carlantonio, who moved from Fengate Asset Management five months ago to lead the creation of the fund.

“The opportunity was there,” Kozik said. “Marco was in a position where he was deciding to move over to a different opportunity, so it was a perfect fit and it was a perfect transition for us to start basically another silo.”

Di Carlantonio spent 18 years at Fengate Asset Management, where he was managing partner and helped lead its growth from a “$20-million to a $3-billion” company of assets under management.

“I was probably responsible for the bulk of the more recent real estate transactions,” he said. “I probably did close to . . . a billion dollars worth of real estate transactions while I was there.”

Other members of the management group are Windsor Group founder and CEO Rocco Marcello (a former governor of the Toronto Stock Exchange), president John Cundari and managing partner Jordan Kupinsky.

“We are excited about this new real estate fund given the tremendous opportunities we see in the market,” said Marcello in a release announcing the fund, which is being made public this morning.

Di Carlantonio and Kozik said the Windsor fund will focus on multiresidential properties, as well as retail which could be redeveloped or repurposed.

”Our equity involvement is anywhere from $5 to $15 million,” he said “That allows for project size with leverage to go beyond that to $30 million. That would be our bite size in terms of equity.”

Di Carlantonio said Windsor Group will be looking both to partner with other other real estate companies in joint ventures, or can go it alone depending on the assets involved.

Fund born out of pandemic

The timing for launching the fund is no coincidence.

“This fund was born out of the pandemic and the fact that there would be opportunities that would present themselves as a result,” Di Carlantonio said. “There will be certain developers not being able to carry through on their developments, or some parcels of real estate facing challenges with the pandemic, or with the economic fallout.”

Although no seed assets are committed to the fund, he said there are “two or three” prospective properties being considered. The plan is to leverage Windsor’s existing contacts within the industry to create a pipeline of potential acquisitions.

“Windsor has always prided itself on having very good relationships in Toronto primarily and in the Golden Horseshoe,”  Kozik said. “The real estate sector . . . it’s not a very big community.

“Because Windsor has been doing so many loans and has taken some equity pieces in a lot of developments we have very, very good relationships within the real estate community.”

That network will also allow it to move quickly on opportunities when they arise.

“We are very well-positioned to be able to analyze a property, understand it,” Kozik added. “If we do need some help, we can make a phone call and find out about the property.

“We can look at an opportunity and decide very quickly if it makes sense for this fund.”

LiUNA is a longtime investor with Windsor Group, “so it was a natural for us to go to them” to get the fund started, Kozik said.

“We look forward to partnering with LiUNA Windsor, who have produced outstanding results for us over the past 10 years and are looking ahead to the many opportunities the new fund represents,” Joseph Mancinelli, LiUNA VP and regional manager for Central and Eastern Canada, said in the release.

Di Carlantonio said as the fund acquires assets, Windsor hopes to expand it and bring in new investors.

About Windsor Private Capital

Since 1992, Windsor has provided structured credit, bridge financing and equity solutions to emerging and middle market companies, entrepreneurs and high-net-worth individuals.

It has experience in numerous sectors including real estate, financial services, technology, telecommunications, manufacturing and retail.

Together with its affiliates, Windsor advises and manages more than $2 billion on behalf of institutional and high-net-worth investors.