Benson Elliot lands first investment

In its first deal since formation, the fledgling private equity real estate company is teaming up with a Danish developer for a residential project in Copenhagen.

Benson Elliot Capital Management, the European private equity real estate company set up recently by former Doughty Hanson head Marc Mogull, has entered into its first transaction, acquiring a 50 percent stake in a Danish residential scheme for around €120 million ($151 million).

The joint venture, P/S Havneholmen, has been set up with quoted real estate developer Sjælsø Gruppen to complete Sjælsø’s prominent Havneholmen residential project on Copenhagen’s transformed south harbour.

Under terms of the deal, Benson Elliot will purchase 171 condominiums in Havneholmen, totalling around 18,000 square meters.

Danish architects Lundgaard & Tranberg designed the scheme that will be completed in four phases.  Phases 1 and 2 are already under construction, with completion planned for late 2007. Phases 3 and 4 are expected to be completed in 2008.

The deal is the first for Benson Elliot which has been causing a stir in European private equity real estate circles by the speed with which it has built up an investment team.

It has recruited Leopoldo Andreis de Gregorio, formerly with Lehman Brothers’ European private equity real estate team, to focus on investment activities in Italy, as well as Trish Geery, former managing director and head of global real estate for the Dubai Investment Group, and Philip Irons, former head of transactions at Schroders.

Last month, the firm announced the closure of its first fund Benson Elliot Real Estate Partners II at €335 million, which exceeded the initial fund’s €300 million target.

Mogull, a founder and former head of Doughty Hanson Real Estate, left in May 2005 to set up the operation.

In a statement, Mogull said: “To have completed our first transaction just weeks after closing the first Benson Elliot fund is a testimony to the strength of the team we have assembled.”

The deal reunites Mogull with Sjælsø, with whom Doughty Hanson entered into three Copenhagen joint ventures comprising 45,000 square metres of offices and 1,000 residential units worth more than €440 million.

“The venture illustrates our continuing confidence in the Danish property market and in Sjælsø Gruppen,” the statement continued. “The market today is strong, and healthy economic factors underpin the outlook. High employment and low interest rates, combined with substantial buyer liquidity and a sound economy, provide a healthy basis for Copenhagen residential investment,  in the short term as well as further ahead.”