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CIC commits $800m to MSREF VII Global

The Chinese sovereign wealth fund has committed to the bank's latest global property fund, according to reports. Morgan Stanley Real Estate Fund VII Global is likely to close at $6bn, not its original $10bn target.

China Investment Corporation (CIC), the $200 billion Chinese sovereign wealth fund, has committed $800 million to Morgan Stanley Real Estate Fund VII Global (MSREF VII Global), sources have told Reuters.

In November, PERE was told that MSREF VII Global had secured $6 billion in hard commitments for the fund, with another $2 billion soft circled. The Reuters report went on to add yesterday that the bank will likely hold a final close at $6 billion.

Last week, Californian pension fund Contra Costa County Employees’ Retirement Association said it was planning to withhold a proposed $75 million commitment to the fund. The pension's investment committee originally said last year it would commit to the fund, but had yet to complete due diligence on the vehicle.

This January, the New Jersey Division of Investment pension also said it was not planning to close on its proposed $150 million investment to the fund because “current appraised values for real estate” were lagging actual market prices at a time when more “attractive real estate debt-related opportunities” were expected to emerge in 2009. Like Contra, New Jersey had yet to legally commit to the fund.

PERE reported last year, that Morgan Stanley had told investors it was deferring the final close of the fund until the first quarter of 2009, after LPs asked for more time.

In June 2007, the bank’s predecessor fund, MSREF VI International, raised $8 billion. CIC acquired approximately 9.9 percent of Morgan Stanley for $5 billion in December 2007.

Morgan Stanley and CIC declined to comment.