Orion targets €1.3bn for fourth opportunity fund

The European private equity real estate firm has begun fundraising for its latest opportunistic fund aiming to match Orion European Real Estate Fund III in terms of total equity commitments.

Orion Capital Managers has hit the fundraising trail for its latest opportunistic vehicle, Orion European Real Estate Fund IV, with a target to raise as much as €1.3 billion in equity commitments, PERE has learned.

The Europe-focused company fronted by trio Van Stults, Bruce Bossom and Aref Lahham, is understood to be targeting a similar capital haul to its predecessor vehicle, Orion European Real Estate Fund III, which attracted €1.28 billion in 2009.

Like the managers of many other European opportunistic funds launched in 2008 and 2009, Orion is coming towards the end of the investment period for Fund III, predisposing the firm towards embarking on the fundraising trail for Fund IV.

Orion is a private firm which does not comment often on investments, but one of the latest announced acquisitions came in May 2011, when it revealed it had teamed up with bluechip UK REIT British Land in a project destined to become Europe’s ‘largest retail and leisure scheme'. On behalf of Fund III, the company agreed to buy 50 percent of Puerto Venecia in Zaragoza in the north east of Spain for an undisclosed price from Spanish property company Copcisa Corp and unnamed private investors. The fresh equity injection was designed to help progress the unfinished component of the scheme led by British Land, which became involved in Puerto Venecia in 2006 when it formed a 50:50 joint venture with Spain’s Copcisa Corp for the 2 million-plus square foot project in Spain’s fifth largest city.

More recently it has been linked with a deal to buy loans with a face value of €600 million from Ireland’s National Asset Management Agency (NAMA). The portfolio of loans is associated with the British developer, Cyril Dennis. However, no announcement of the deal has been made since Orion was named in a property report as a potential purchaser in December last year. In August 2011, Orion did buy from NAMA the Jamahiriya School site in Chelsea, south west London. In another deal last year, it bought a property in City Road, London, on behalf of Fund III to be developed into a £150 million, 30-storey luxury residential scheme for which it has just received planning consent.

At the time of its last fundraise, Orion said in a statement it had profitably sold over 80 percent by value of all its previous funds' investments prior to the start of the credit crunch in August 2007. The company said in 2009 it was well positioned to capture the “favourable investments arising from the current market turmoil”.  It also added Orion had shifted strategies to take advantage of market opportunities. In addition to direct asset purchases, its prior experience ranged from acquiring real estate loan portfolios, to taking listed companies private.

Orion is not thought to be using a placement agent in its latest fundraising enterprise as it prefers to use its in-house investor relations and capital raising capabilities, although it did hire Credit Suisse Real Estate Private Fund Group for a ‘top-up’ assignment towards the latter stages of Fund III.

The company operates offices in London, Madrid, Paris and Milan with investment professionals on the ground locating and executing deals.

The firm declined to comment.