EUROPE NEWS: Perella Weinberg hits €600 million-plus

New York advisor and asset manager Perella Weinberg Partners is enjoying success as it goes about raising its second opportunistic fund in Europe.

In Europe, New York advisory and asset management firm Perella Weinberg Partners seems be gaining profile. It is the advisor to EADS in the hottest M&A deal in the region between Europe’s largest civil aerospace manufacturer and defence giant BAE Systems.  It also is in ascendency in a less public arena – private equity real estate.

As PERE revealed last month, Perella Weinberg has held an initial close on €600 million in commitments for its second fund, Perella Weinberg Real Estate Fund II. In addition, sources said that a second close was expected soon, so the €600 million total is very likely to have increased. A final close on the fund, which is targeting €1.2 billion in equity, is slated for the first half of 2013.

Perella Weinberg is proving itself a successful newcomer to private equity real estate since the global financial crisis in the way its head of real estate, Léon Bressler, predicted. At PERE’s European conference in 2008, he said: “The difficulty will not be for the newcomers, the new concepts or the new players, but the real challenge is for the largest ones, the most established ones, the ones with history and the weight of very strong culture. The field is wide open between established players and newcomers.”

Bressler, a veteran of European real estate, joined Perella Weinberg as a partner and, in 2007, started raising the firm’s first commingled real estate fund with a bullish target of €1.2 billion. At the time, it seemed like ‘top of the market’ stuff, with fingers being pointed at a new firm looking to raise more than €1 billion for a maiden fund in a ‘frothy’ market.

Many naysayers have been made to eat their words. In fact, Perella Weinberg turned out to be more conservative than many others players with a 2007 vintage fund. Having realised there was a real estate bubble about to burst in Europe, Bressler and his team resisted investing the firm’s maiden fund throughout 2007 and also guarded against “catching falling knives” in 2008.

Five years on, Perella Weinberg Real Estate Fund I is fully invested, having saved its capital for 2009 and onwards. The fund has suffered no blow ups, according to those that know the firm, and it is now in harvesting mode, reaping profits.

Indeed, last month, limited partners received a large distribution from two investments made by the first fund. Perella Weinberg realised a 51 percent stake in German retailer Mfi by selling to Europe’s largest listed company, Unibail-Rodamco. It also sold a 50 percent stake in Ruhr-Park, one of Germany’s largest shopping centres, to the same French firm.

Investors seem to be repaying Perella Weinberg with commitments to its next fund.