Moorfield Group, the London-based private equity real estate firm, has announced a first closing for its third opportunity fund.
The firm has raised more than £100 million (€117.5 million; $153 million) for its Moorfield Real Estate Fund III, the third in a series of opportunistic real estate funds raised by the firm since its inception in 1996.
Moorfield raised the capital from existing investors both from the US and Europe. The firm said it expected further closings to include equity from other continents.
The fund is expected to provide Moorfield with the resources to invest in both traditional and alternative real estate transactions in the UK. It has a three-year investment period and an eight-year life during which time the firm hopes to invest its capital and generate returns of between 15 percent and 20 percent IRR and a 2x equity multiple.
Initial investments have already been sourced, the firm said. Marc Gilbard, chief executive of Moorfield said: “In this very challenging fund raising environment we feel privileged to have the support that we do from our existing limited partners and reaching the first close is a significant milestone.”
“We expect second and subsequent closes to follow shortly as the fund is now live and originating investment opportunities.”
Gilbard emphasized that investors had expressed interest in co-investing in transactions with the firm also and Property Week, the UK commercial property magazine, reported the firm expected to have between £350 million and £500 million of equity at its disposal via co-investment and joint venture channels.
He said: “We have also been approached by various other organizations who would like to invest alongside MREFIII and take advantage of Moorfield’s asset and financial management capabilities and this partnership approach is something we are familiar and comfortable with undertaking.”
“Hence, the size of the investment opportunities and the total assets under management will very likely be larger than the size of the fund alone would suggest.”
Moorfield currently has about £2 billion of assets under management. It raised its first fund in 2005, attracting £265 million of equity. It raised its second in 2007, garnering £389 million.