Morgan Stanley Real Estate has its sights set on raising as much as $8 billion (€6.2 billion) for its next opportunity vehicle, according to a Bloomberg News report citing Morgan Stanley officials. If the firm hits the target, it would far surpass the record set by The Blackstone Group, which raised $5.3 billion for its latest vehicle earlier this year.
A spokesperson for Morgan Stanley said private placement rules prevented the firm from either confirming or denying the report.
Morgan Stanley Fund VI International would be invested outside the US, with three-fourths slated for developed markets and the remaining quarter tagged for investments in emerging markets, according to the report. It would come close on the heels of the firm’s most recent international fund, Morgan Stanley Fund V International, which closed on $4.2 billion earlier this year.
MSREF’s global footprint has been getting even larger, with recent investments made in emerging markets such as Russia and India this year.
At PERE’s North American Private Equity Real Estate Conference earlier this week, Jay Mantz, managing director and global co-head of real estate for the firm, said a significant share of “this weight of global capital flows” is aimed at emerging markets.
“A huge emphasis on emerging markets is a must,” said Mantz, who noted that real estate opportunities exist in what he termed “New Europe,” markets such as Poland and Turkey with strong demographic trends, as well as Asia’s two titan’s of economic growth, China and India, which are experiencing rapid urbanization.
In recent months, Morgan Stanley closed its fifth US real estate fund on $1.8 billion. The fund, which is four times larger than its 2000 predecessor, was already more than 60 percent invested at the time of the close, according to a statement.
“Compelling investment opportunities continue to exist throughout the United States from improving property market fundamentals, secular demographic trends and take-private transactions,” said Michael Franco, managing director and head of Morgan Stanley Real Estate’s US operation, in a statement released at the time of the close.
The same week, the firm announced that it had closed its second Special Situations Fund on $2.2 billion.