Westbrook Partners has told investors in its latest $2.5 billion fund that they can reduce their commitments by up to 10 percent – without penalty.
According to sources familiar with the matter, Westbrook founder and chief executive officer Paul Kazilionis decided to offer the deal to all LPs in the firm's latest vehicle, Westbrook Real Estate Fund 8, in a move to help ease potential investors' liquidity issues.
If some investors choose not to take the full reduction, others will be able to cut their commitments by more than 10 percent, the source added. Westbrook declined to comment to PERE.
Westbrook last month hired Matthew Kenney, David Finkel, Zubin Irani, Andrew Gummer and Kunihiko Okumura as principals and managing principals to work from its New York, London and Tokyo offices, as it prepares to deploy around $3 billion in dry powder.
The New York-based firm is believed to have $800 million of equity remaining in its $1.65 billion Westbrook Real Estate Fund 7. Westbrook has yet to make any investments from Fund 8, with the firm making its last significant deal in August 2007.
Private equity firms, including TPG and Permira, have also allowed their LPs to shrink commitments to their funds in an effort to help cash-starved investors. TPG has reportedly allowed LPs to cut their commitments by as much as 10 percent, while Permira allowed its investors to cap at 60 percent their original commitment to the firm’s fourth buyout fund. Eighteen LPs took up Permira's offer, reducing the size of its €11.1 billion fund to €9.6 billion.