Return to search

Merrill Lynch suspends Asia fund

Merrill Lynch puts plans for its second Asian real estate opportunity fund on ice as it awaits direction from the bank’s new owners, the Bank of America.

Merrill Lynch has shelved plans for a second real estate opportunity fund for Asia.

The bank, which manages the $2.65 billion Asian Real Estate Opportunity Fund, had planned to bring a follow-up vehicle to the market last year. But PERE understands that these plans were put on ice early this year as the fundraising climate became more challenging.

The fund management arm has also become subject to scrutiny by its limited partners over its future following the takeover by Bank of America at the turn of the year.

Merrill Lynch had not started fundraising for the Asian Real Estate Opportunities Fund II, but no new vehicles will be considered until Bank of America determines the future strategy for the platform.

Meanwhile, news of potential bids for the platform from Blackstone Group and Apollo Management have surfaced.

The suspension of plans for a second vehicle comes as Merrill Lynch’s rival, Citi Property Investors, cancelled its second Asian real estate opportunity fund. Last week, PERE revealed that CPI shelved its plans for an approximately $1 billion vehicle and had handed back close to $400 million in equity back to its investors.

Merrill Lynch has recently replaced the head of its real estate fund management platform Tim Grady with Martin Seol after the former resigned from his position. At the time of going to press, Grady was not understood to have taken on another role.

See the full story in this month’s PERE magazine.