Tristan Capital Partners has raised €950m (£782m) for its third opportunistic real estate fund – beating its €750m target.
A total of 36 institutional investors – 22 new and 14 repeat – participated in European Property Investors Special Opportunities 3.
Around 40% of the capital came from the US – where many of the new clients were concentrated – 40% from Europe and the Middle East and 20% from Asia.
The pan-European real estate manager will invest the vehicle into Western and Central European markets across the office, logistics, retail and residential sectors.
The value-add/opportunistic fund’s strategy is to target investment returns of 15% net to investors and with a maximum leverage of 60% loan-to-value.
It has already committed more than 25% of its capital to investments ranging from offices in Germany and the UK to shopping centres in Austria and Poland.
Tristan set a hard cap for EPISO 3 at €950m “consistent with the company’s long-held philosophy that too large a vehicle often leads to poorly considered decisions by portfolio managers who feel pressured to prioritise placing capital over the careful creation of a well-diversified investment portfolio”.
Monica O’Neill, partner and head of client relations and marketing, said: “The demand from existing and new investors for this fund has been overwhelming. Toward the end of the capital raising, we had almost €500m of unfilled demand for the fund.
“While quite pleasing to us as a firm, it also confirms our view 18 months ago that the eurozone would weather its crisis and global capital would come back into the European real estate investment markets, pursuing the opportunities that have become more evident as the economy approaches recovery.”
Ric Lewis, chief executive of Tristan, said: “Even though we are only at the beginning of capital formation in the current real estate market cycle, we are already seeing some evidence of the upward pressure on asset prices in some markets. The size of our fund and the design of our investment platform has been created and refined to be nimble and proactive to stay ahead of these shifts in a rapidly changing market environment.
“A potential rebound in asset prices will ease the pain for banks wanting to shift distressed loans and properties off of their balance sheets which could mean more product for investors, but we all have to be extremely wary of letting the weight of money increase prices ahead of fundamentals or we risk repetition of the mistakes of the not too distant past.”
bridget.o’connell@estatesgazette.com
