Tristan Capital Partners, the London-based firm, has raised €950 million for its European value-added and opportunistic fund it confirmed today.
The grand total for European Property Investors Special Opportunities 3 (EPISO 3) means it blasted through a €750 million target to reach the hard cap.
Confirmation of the capital raise comes a month after PERE revealed the achievement. In a statement, the company said it received a total of 36 institutional investors – 22 new and 14 repeat limited partners – with around 40 percent of the capital coming from the US where many of the new clients were concentrated. The remaining 40 percent was from Europe and the Middle East while Asian investors accounted for 20 percent.
Monica O’Neill, partner and head of client relations and marketing, said: “The demand from existing and new investors for this fund has been overwhelming. Toward the end of the capital raising, we had almost €500 million of unfilled demand for the fund. While quite pleasing to us as a firm, it also confirms our view 18 months ago that the Eurozone would weather its crisis and global capital would come roaring back into the European real estate investment markets, pursuing the opportunities that have become more evident as the economy approaches recovery.”
EPISO3 is Tristan’s sixth fund with a mandate is to invest in western and central European markets across the office, logistics, retail and residential sectors. The fund’s strategy is to target investment returns of 15 percent net to investors and with a maximum leverage of 60 percent loan to value.
Speaking of reaching the hard cap, Tristan said the fund size was “consistent with the company’s long-held philosophy that too large a vehicle often leads to poorly considered decisions by portfolio managers who feel pressured to prioritise placing capital over the careful creation of a well-diversified investment portfolio”.
The fund has already committed over 25 percent of its capital to investments ranging from offices in Germany and the UK to shopping centres in Austria and Poland.
Ric Lewis, chief executive, said: “Even though we are only at the beginning of capital formation in the current real estate market cycle, we are already seeing some evidence of the upward pressure on asset prices in some markets. The size of our fund and the design of our investment platform has been created and refined to be nimble and proactive to stay ahead of these shifts in a rapidly changing market environment.”
He also said a potential “rebound in asset prices” would ease the pain for banks wanting to shift distressed loans and properties off of their balance sheets which could mean more product for investors. “But we all have to be extremely wary of letting the weight of money increase prices ahead of fundamentals or we risk repetition of the mistakes of the not too distant past”.