Harbert raises $522m for Europe fund

The Alabama-based firm said it had received $325 million of equity commitments and $197 million of co-investment equity for Harbert European Real Estate Fund III, for which it originally set out on the fundraising trail at the end of 2009.

Harbert Management Corporation has raised $522 million (€387 million) for its latest European opportunity fund, it has revealed.  

The Alabama-based firm said the fundraise for Harbert European Real Estate Fund III included some $325 million in equity commitments and $197 million of co-investment equity and added that its third pan-European real estate opportunity fund would focus on deals involving “over-leveraged borrowers, upcoming debt maturities and institutional owners refocusing on core competencies or markets”.

To date, Harbert has made four acquisitions for the new vehicle, it explained, most recently acquiring around four million square feet of UK industrial assets. All current investments are performing at or above underwriting targets, added Harbert in a statement.

Trumpeting the closing, Raymond Harbert, chief executive officer and founder, said: “With highly leveraged buyers forced out of the market and many investors still on the sidelines working through legacy portfolio issues, we see opportunities in the European real estate market that we are well-positioned to take advantage of.” He also said that the European investment market seemed to be taking more time to recover than in the US. However, “high-grade distribution assets in the UK and prime office space in Paris, for example, provide attractive long-term investment opportunities,” he argued.

Senior Managing Director, Scott O’Donnell, added: “Cash is still king, and the competitive landscape and risk-adjusted return profiles are at their most attractive levels in recent years.”

HMC’s own commitment to fund III is €20 million, which was made on the same terms and conditions as all other limited partners.

The company launched its fundraising effort in a difficult market at the end of December 2009, setting off with a target of €500 million.