Guernsey closed-ended investment company TFG has entered into an agreement with ex-Morgan Stanley executives John Carrafiell, Sonny Kalsi and Fred Schmidt, to invest in their newly created real estate venture, GreenOak Real Estate.

Guernsey closed-ended investment company TFG has entered into an agreement with ex-Morgan Stanley executives John Carrafiell, Sonny Kalsi and Fred Schmidt, to invest in their newly created real estate venture, GreenOak Real Estate.

All three partners formerly worked together at Morgan Stanley for more than a decade. Carrafiell, who is based in London, was the former global co-head of the real estate investment banking and investing business. Kalsi, based in New York, was the former global head of the real estate investing business, and Schmidt, based in Tokyo, was the former head of the real estate investing business for Asia.

Under the terms of the deal, TFG will receive a 10% equity interest in GreenOak and will provide GreenOak with, among other things, a working capital loan of up to $10 mln. It is also providing a $100 mln co-investment commitment that is expected to fund up to a limited fixed percentage amount of any GreenOak sponsored investment programme with TFG retaining the option to invest further amounts.

TFG will also grant the GreenOak Founders options for approximately 3% of TFG's listed shares.

Paddy Dear, a director of TFG and a principal of Polygon Credit Management, the investment manager of TFG, commented: 'We think there are significant opportunities in the real estate market, including widespread distressed opportunities, and gaining further exposure to this asset class especially at attractive fee levels is very appealing. We are also particularly excited to partner with individuals with such extensive experience. We believe John, Sonny and Fred continue the TFG model of seeking to partner with exceptional asset managers.'