Tristan poised to seal deals after first close of new Curzon fund

Tristan Capital Partners is poised to finalise a number of deals within the next two weeks following an earlier-than-planned first close on capital raising for its new Curzon Capital Partners III. The funds generated from the first close, which was realised within three months of the fund launch, will be used to commit to several investment transactions for which the fund has secured exclusivity, CEO Ric Lewis said.

'We agreed with an initial group of our investors to move to a modest early first close on CCP III, to secure the equity capital for several investments which fit perfectly into the fund’s core-plus strategy. We are in advanced due diligence with several more potential investors and expect an additional closing in late summer or early autumn, but this was a situation where time was of the essence.'

Including a EUR 200 mln revolving line of credit facility, arranged and completed with RBS International, the real estate investment manager currently has total firepower of over EUR 250 mln. The London-based fund manager aims to raise a total of EUR 500 mln for the fund which will focus on core-plus investments across all sectors in the UK and continental Europe. After raising EUR 60 mln in the first close from three investors, Lewis is aiming to raise the bulk of the remaining funds by August or September.

Lewis said the CCP III Fund has secured exclusivity on five investment transactions spanning the office, retail, residential and logistics sector and located in the UK, Germany, Austria, and Central Europe markets collectively totalling over EUR 250 mln. Four of the five deals have been negotiated off-market. Two of the deals are expected to be finalised later this week.

Lewis said the fund aims to take advantage of the 'core-plus gap' in the European real estate marketplace that Tristan research has identified a gap between opportunistic and core investment strategies. 'We believe a core-plus investment strategy will be a target rich opportunity in Europe over the next couple of years. Spreads between core-plus/value added yields and core yields are at a cyclical high. The challenge, and the opportunity, is to sort through the large volume of possible core-plus investments for those which possess significant potential for value enhancement by active asset management and also have the highest likelihood of attracting institutional buyers as the economic cycle advances and improves across Europe.'

Lewis said the fund would continue to target the UK, Germany, Austria and CEE for the core-plus segment as well as Scandinavia and France.

CCP III is targeting total returns of some 12%. Lewis said the fund was on track to generate between 50-75% of returns from direct income.

In addition to CCP III, Tristan also manages its value added/opportunistic fund series including European Property Investors Special Opportunities LP (EPISO). EPISO has completed on approximately EUR 1 bn of acquisitions in the last 15 months and is in the midst of additional investments in Germany, France and the UK. EPISO has committed approximately 80% of its equity capital with the investment period remaining open until June of 2012.