Patria seeks to buy Insper-occupied building for nearly its book value
- The R$434.9 million offer provides virtually no premium to FCFL11; the deal structure allows HGRU11 to choose between cash and units trading below their issue price
Patria is seeking to acquire the building occupied by Insper in Vila Olímpia for R$434.9 million. The figure may seem significant, but it loses some of its appeal when compared with the net asset value of Campus Faria Lima (FCFL11), the fund that owns the property.
In June, the fund had a net asset value of R$434.86 million. The offer therefore exceeds that amount by just R$39,000 — a small difference in a transaction approaching half a billion reais. Compared with the property’s book value of R$429.75 million, the premium offered is only 1.2%.
In other words, Rodrigo Abbud’s firm is seeking to acquire a fully occupied asset in one of São Paulo’s most valuable districts, backed by long-term leases, without paying a significant premium.
Under the proposal, HGRU11 may, at its sole discretion, pay for part or all of the acquisition with newly issued units priced at R$128.20 each, plus a fee of R$0.06 per unit.
In the market, however, HGRU11 units were trading at R$115.28 on September 4. If the entire payment were made in this form, FCFL11 would receive approximately 3.39 million units, worth around R$391 million based on that day’s market price — nearly R$44 million below the transaction’s nominal value.
The discount would not necessarily represent a permanent loss, since the unit price could fluctuate before the deal closes. Even so, the risk would remain with the seller. FCFL11 would also bear the issuance costs and face restrictions on selling the units received.
According to the fund’s management reports, the building generates approximately R$3.2 million per month from rent paid by Insper alone, in addition to revenue from the parking facility operated by Estapar. The property is fully occupied and represents FCFL11’s entire real estate portfolio.
The math for unitholders
In nominal terms, the R$434.9 million offer appears to represent substantial appreciation compared with the R$167 million invested when the fund was established in 2010. Inflation, however, erodes nearly all of that gain.
Adjusted for inflation under the IPCA index through July 2026, the original amount is equivalent to R$411.1 million. This means the proposal adds only R$23.8 million in real terms, representing appreciation of 5.8% over 16 years, or approximately 0.35% per year above inflation.
Patria’s path will not be easy, as resistance from unitholders is nothing new. In 2022, Insper itself offered R$385 million for the building, but the proposal was rejected at a unitholders’ meeting: 35.8% of unitholders voted against the sale, while only 0.8% voted in favor. Adjusted for inflation under the IPCA index through July 2026, that amount would now be equivalent to approximately R$482 million — nearly R$47 million more than Patria’s current offer.
