Morgan Stanley AIP holds close on new FoF

Morgan Stanley Alternative Investment Partners held a final close on its debut fund of funds to invest in multiple asset classes, including real estate.

Morgan Stanley Alternative Investment Partners (AIP), the fund of funds unit of Morgan Stanley, has held a final close on its first standalone fund of funds targeting real, financial and intellectual property assets, PERE's sister publication Secondaries Investor reported today.

Private Markets Income Fund I (PMIF I) closed on more than $225 million, the firm said in a statement on 23 February. The fund, which launched in 2014, will invest in niche income-oriented private market strategies across primary, secondaries and co-investment strategies. PMIF I will target real assets, including real estate; private credit; royalties and special situations.

“Our clients rely on alternative investments to meet many different objectives, and this capital raise demonstrates how investors are now looking to this asset class to deliver a balance of yield and total return,” John Wolak, head of AIP Private Markets, said in the statement.

PMIF I is significantly smaller than the firm’s previous fund of funds, the 2014-vintage AIP Private Markets Fund VI which closed on $1 billion, and the 2013-vintage AIP Global Secondary Opportunities Fund II, a dedicated secondaries vehicle that raised $770 million, according to PEI Research & Analytics.

While the fund is Morgan Stanley AIP’s debut vehicle solely dedicated to this strategy, the firm has been investing in this space since 2000, according to the statement.

Morgan Stanley AIP, which is part of Morgan Stanley Investment Management, invests across private equity, real estate, hedge funds and multi-asset class strategies for institutional investors and high net worth clients, according to the statement. The unit had $37 billion in assets under management on 31 December.

In August, Morgan Stanley AIP recruited a new co-head for its real estate business, Brian Schneider. His role includes responsibility for sourcing, underwriting and closing real estate deals for the Americas. Schneider reports to John Wolak, head of AIP Private Equity.

Schneider joined AIP as a consultant in May, was made a full-time employee as a managing director in July and then appointed to the co-head position. His hire marked a major shake-up with the leadership at AIP’s real estate business, as both of the co-heads, David Boyle and Paul Vosper, are expected to leave by June.