Tristan prepares next European mega-raise

The London-based private equity real estate firm wants €1.5bn or more for its first opportunistic fund since becoming part-owned by New York Life.

Tristan Capital Partners is back in the market with its latest opportunistic fund, its first to be raised since bringing a new minority owner onboard.

The London-based private equity real estate firm, founded in 2009 by Ric Lewis, is targeting €1.5 billion or more for its Tristan European Property Investors Special Opportunities 5 (EPISO 5) fund, according to meeting materials from Texas Municipal Retirement System. The US pension’s investment staff and real estate consultant Courtland Partners recommended a commitment of up to €60 million to the vehicle at last week’s meeting.

A spokeswoman for Tristan declined to comment on the fundraise. The firm is continuing its strategy for the fund series, focused on buying assets with “clear, correctable deficiencies” that it will fix and reposition, according to TMRS. Tristan is targeting a 12-14 percent net internal rate of return for the fifth fund.

Ric Lewis: founded Tristan in 2009

Tristan closed the predecessor vehicle on €1.5 billion in July 2015 after just four months in market, PERE previously reported. The firm smashed its €950 million target for EPISO 4, leaving it 30 percent oversubscribed and said it even turned away more than €500 million of unfulfilled demand. EPISO IV was the ninth-largest ever European opportunistic fund, according to PERE data. For that vehicle, about 50 percent of the capital came from investors in the US, 25 percent was from Europe and 25 from Asia-Pacific. The fund had a total of 34 investors.

EPISO 4 returned 7.3 percent net as of September 30, according to January meeting materials from the New York City Fire Department Pension Fund.

Tristan’s latest fundraising effort is the first since it went under new minority ownership. In February, New York Life, the investment management business of US insurer New York Life, purchased a 40 percent stake in the firm for an undisclosed price, PERE reported at the time. The US insurer made the acquisition through its European asset management firm Candriam Investors Group, its first sizeable commitment to private real estate equity investments as well as its first in Europe’s property market.

Candriam is co-investing in Tristan’s funds, starting with a €50 million commitment to its core-plus offering, Curzon Capital Partners 5. The firm could not be reached for comment about any commitment to EPISO V.

If Tristan is successful even reaching its target for EPISO 5, the firm will have two spots on the top 10 largest fundraises for European opportunistic vehicles, according to PERE data. Here’s how the fundraise stacks up: