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Tristan to seek €1bn for third Euro fund

The London-based property fund manager has opened up dialogue with its investor pool ahead of a launch anticipated at the start of 2015.

Tristan Capital Partners, the London-based property fund manager, has begun talks with existing investors over the launch of a €1bn European fund, PERE can reveal.

Only seven months after having hit its hard cap for its €950 million, European Property Investors Special Opportunities 3 (EPISO3) it is understood that the fund is already around 80 percent invested and Tristan is planning to formally go back to the market to raise more equity in the first or second quarter of next year with a first close expected shortly after.

EPISO3 closed heavily oversubscribed by almost €500 million in January and well beyond the firm’s initial target of €750 million. The new fund will therefore be an opportunity for those investors unable to invest via that vehicle to invest via this one.

The fourth European fund will follow the same format as the previous fund with a three year investment period and an eight year life, targeting investment returns of 15 percent net to investors. A maximum leverage of 60 percent loan-to-value would give it firepower of €2.5 billion.

As with its previous fund it will have a pan-European and cross sector mandate. With the relative recovery of the UK and western European markets in the past year it is thought possible that the new fund may ultimately end up with a greater weighting towards southern and eastern European markets than the previous fund dependent upon future market conditions. 

At the time of the final close for EPISO3, Monica O’Neill, partner and head of client relations and marketing said that the unfulfilled demand for the firm confirmed its view “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 has accelerated its deployment of capital in the UK in the past six weeks. Last month it bought Fort Dunlop, a 375,000 square foot mixed use development in Birmingham from Urban Splash and Pears Group as well as the £153 million mixed-use Tree portfolio out of receivership, which was previously controlled by Solomon Noé.