Managers secure institutional commitments for distress funds

EUROPE – Two fund managers have raised fresh capital from institutional investors for funds that aim to exploit continuing distress, value weaknesses and market dislocation in the real estate market.

Tristan Capital Partners raised €170m of commitments for a first closing of its real estate private equity fund, European Property Investors Special Opportunities 3 (EPISO 3).

The fund targets investment opportunities created by economic restructuring in distressed European markets where equity and debt capital are in short supply.
 
Ric Lewis, chief executive at Tristan, said: "The severe risk aversion of many investors, combined with an enduring shortage of equity and debt capital and a historically low volume of new developments, have combined to create a favourable investment environment in Europe.

"Furthermore, prudent risk-taking by those with the capital, creativity and discipline to avail themselves of the opportunities in coming months as Europe travels down a long and uneven path to economic recovery may be as good as we have witnessed in the last several years."

EPISO 3 will invest in Western and Central European markets across the office, logistics, retail and residential sectors.

The fund's strategy is to target investment returns of 15-18% for a 4-8 year investment period and with a maximum leverage of 60% loan-to-value.

Meanwhile, Rockspring Property Investment Managers has reached final closing for its TransEuropean Property Limited Partnership V, securing commitments of €350m in total.

Robert Gilchrist, chief executive, said the market and economic dislocation across Europe had created some "exciting" opportunities. 

According to Rockspring, the fund will identify core/core+ and value-add real estate assets where a market-led drop in valuation takes place and that offer the potential to enhance capital and income value through asset management initiatives. 

The fund will focus on retail, office and industrial in Western Europe – namely Germany, the UK, France, the Nordics and Switzerland – and Poland.