Morgan Stanley Real Estate Investing has held has closed its latest global opportunity fund with $4.7bn of equity.
The property division of the giant US bank said that it had already begun investing the equity for its seventh global fund, known internally as G7.
The equity raising is one of the largest undertaken since the beginning of the property downturn, but represents a drastic scaling back from MSREI’s initial equity target of $10bn.
In order to make sure investors would commit to the fund MSREI had to allow investors to reduce their commitments to the funds. It also gave investors in its fifth and sixth global funds reduced fees.
These two funds, MSREF V and MSREF VI have incurred significant losses after investing most of their equity at the top of the market in highly leveraged deals.
In an interview with Private Equity Real Estate Magazine MSREI chief executive Owen Thomas said: “We did everything we could to listen to our partners and make accommodations to help them.”
“We have had a big drop in values in real estate around the world – and they have certainly been more precipitous in the US and various areas of Europe and Japan,” he added.
“That’s why our primary focus will be on those areas. This is a very unique cyclical opportunity to buy real estate because there is a lot of distress. There is a real chance to make a lot of money again for our investors and we are excited about the future.”
