Benson Elliot, the London-based private equity real estate firm, has raised approximately €600 million in a first closing for its latest pan-European value-added real estate fund, Benson Elliot Real Estate Partners V.
The firm declined to comment on its fundraising, but PERE can reveal investors from around the world backed the closing, including a number of re-upping institutions. Indeed, according to one source familiar with the matter, senior Benson Elliot executives were said to be surprised at the amount of capital raised in the closing and were unsure how much longer the firm would need to market the fund. The hard-cap for the fund is understood to be €850 million.
The strong traction for BEREP V is another indication of how popular higher risk and return strategies in Europe have become at this point in the market cycle. According to the European Association for Investors in Non-Listed Real Estate Vehicles (INREV)’s latest Investment Intentions study, Europe today commands the largest regional investor allocation at 35.5 percent, ahead of the US at 29.3 percent and Asia at 14.1 percent. INREV’s proportions were based on a sample of 107 investors, seven fund of funds managers and 206 fund managers, with investors representing a combined value of €427 billion.
€35bn raised for closed-ended European funds in 2017
€25bn raised in 2016
Support for European strategies is also demonstrated in PERE’s fundraising numbers. Almost €35 billion was raised for closed-ended European funds in 2017, up from almost €25 billion a year prior.
Against that general positive sentiment, firms boasting strong performance records are finding their funds populated with commitments quickly. PERE data show last year’s total capital raising volume mirrors the amount raised in 2015, but it was done by only half the number of funds. Indeed, the average fund size in Europe last year was €833.4 million, more than twice the €408.2 million average in 2014.
Benson Elliot has not publicized its returns but it is understood to have at least met its 14 percent net return target across its prior funds, positioning it among the more popular series in the market.
The firm closed its previous fund, BEREP IV, on its €625 million hard-cap in June 2016. A further €75 million in sidecars was also raised for the vehicle. That fund was backed by approximately 30 investors including public and private pension funds, university endowments, sovereign wealth funds, insurance companies and family offices. It was deployed into deals including hotels in Paris and Milan, offices and residential properties in Berlin and shopping malls in Bologna and various cities in the UK.
The fundraising is also Benson Elliot’s first since founder Marc Mogull passed on day-to-day leadership responsibilities to co-founder Trish Barrigan in May. As of the start of the year, Mogull has assumed the dual role of executive chairman and chief investment officer.