BoA ML Euro team completes MBO, forms Peakside

The team behind Bank of America Merrill Lynch’s European private equity real estate business has bought out the management of the platform.

The team, led by Roger Barris, announced today it had agreed to buy out BoA ML’s GP positions and had launched London-based Peakside Capital to continue management of its two funds.

Talks about a management buyout have been rumbling on for months since BoA decided managing private equity real estate funds was not a core business.

Peakside said Merrill Lynch Real Estate Opportunity Fund had a total of €261 million commitments, and that it would replace Bank of America as the GP and rename the fund Peakside Real Estate Fund I.  It also said it was acquiring the bank’s GP economic interest in Bosphorus Real Estate Fund I, which has €204 million of commitments.

In addition it has completed a portfolio management agreement for Peakside to manage a portfolio of European real estate investments held by BoA affiliates.

The funds’s limited partners voted for the move with the requisite voting percentages, said Peakside, however BoA has not sold its LP interests in either of the funds and it plans to maintain them following the transaction.

Peakside’s other former BoA ML executives include Stefan Aumann, Boris Schran and Mark Fenchelle. The team was responsible for the management of the two real estate funds and the European portfolio of assets.

In addition to the senior managers, Peakside has employed 13 former members of the bank’s real estate group and plans to hire an additional four people including Christoph Munte, formerly of Morgan Stanley, who will join as general counsel and a member of the Peakside management committee. 

The firm has opened offices in the Cayman Islands, Switzerland, the UK, and Luxembourg. 

Barris, who becomes chairman of Peakside, said in a statement: “Peakside will launch as a mid-sized manager with a strong track record, an experienced team and the investment capacity needed to take advantage of the opportunities that are rapidly emerging in real estate in Europe.” 

He added; “This is a great opportunity for Peakside, our employees and our investors.  At the same time, the transaction will assure continuity of management for the two funds and the other BofAML real estate investments in Europe, helping to maximize the value of these assets.”

Jim Forbes, Bank of America Merrill Lynch’s global principal investments executive, said: “BofAML has made the decision that the business of sponsoring real estate funds and direct real estate investments is not a core activity. We considered many alternatives for these assets, and driven by our confidence in the Peakside team, we concluded that the best option, in our capacity as a limited partner in the funds and the owner of the proprietary assets, is to allow the Peakside team to continue to manage the funds and the legacy European real estate assets as an independent company.”