Europa Capital holds first close for €750m Europe oppo fund

The London-based private equity real estate firm held a first close on Friday, raising between €150m and €170m of equity, PERE has learned.

Europa Capital has held a first close on its latest opportunistic real estate fund, Europa Fund IV, which will focus on investing in the European Union, Norway and Switzerland.

The London-based firm held the close on Friday, according to sources, with capital commitments totalling between €150 million and €170 million. The Los Angeles County Employees’ Retirement Association (LACERA) is among the investors, having made a €50 million investment.

With a gross equity target of €750 million, it is currently one of the largest real estate opportunity funds being raised in the region.

Others firms with targets ranging between €450 million and €1.2 billion include New York’s Perella Weinberg Partners, AREA Property Partners, Resolution Property, Frogmore, and Orion Capital Managers.

The firm declined to comment on its fundraising activities, however, Europa’s Fund IV, which is targeting a gross internal rate of return (IRR) of 25 percent and a net IRR of 20 percent, will focus on: the repositioning of real estate assets into institutional quality; loan restructurings where a new infusion of equity is required; acquiring prime assets from motivated sellers; and recapitalisations of assets or loans where the fund will act as the new borrower or sponsor.

Similar to its predecessor, the new fund will pursue investments in the range of €15 million to €40 million of equity, “which are generally too small for large institutional investors and too large for local investors,” John McClelland, LACERA’s principal investment officer for real estate, and Amit Aggarwal, real estate investment officer, wrote in a recent memorandum to the pension’s board of investments. The fund primarily will invest in the more liquid European real estate markets in Europe, such as the UK, Germany and France.

Since Fund III, Europa has undergone a significant change of ownership, with the Rockefeller Group International (RGI) acquiring a 75 percent stake in the firm in October 2010. However, as LACERA noted, RGI is not involved in the day-to-day operations of Europa, has no staff in Europa’s offices and is not involved in managing any of Europa’s funds.