GLOBAL - A European investment club for family offices has been launched in response to dissatisfaction with real estate funds and has received backing from US-based Capricorn Investment Group.
Family Office Real Estate Partnership (FORE) could enable family offices and high-net-worth individuals to co-invest directly in European property and has been established after a year of discussions with investors.
Capricorn, which represents several family offices in California and New York, including former eBay president Jeffrey Skoll, has committed €25m to the venture.
FORE's managing partner Basil Demeroutis, who was previously responsible for Capricorn's global real assets portfolio, said the "club model" represented a "paradigm shift" for the way in which family offices would invest in real estate in the future.
He said investors were dissatisfied with traditional real estate funds, citing a lack of transparency, alignment of interest and proximity to investments as their main concerns.
Stephen George, co-founder and chief investment officer at Capricorn, said the FORE model was not necessarily new - his firm had entered into similar partnerships before - but its appeal had been enhanced by recent experiences.
Demeroutis said: "Capricorn's involvement as a cornerstone investor is an important milestone for our new model, which offers sophisticated family offices the chance to invest in commercial property in a more transparent way and at a lower cost than traditional property funds.
He added: "The model gives us the ability to go into the market and secure opportunities while at the same time providing club members with a degree of control over what we are doing.
"Our model was designed by the families themselves, and is an extension of their own direct real estate activities. In the end, we are a club of like-minded investors that share the same values, and we have similar views in terms of what represents long-term value."
FORE is aiming to build a club of no more than 20 members and acquire as much as €100m worth of real estate per year in Europe.
The partnership's initial focus will be on assets in the London office sector and in German office and multi-family residential sectors.
Peter Dove, partner and head of asset management at FORE, said the firm would target "deep value" outside prime, most likely secondary assets in core locations in the €10-30m range. He said this section of the market was often overlooked and mispriced.