Curzon nears €800m for European fund

The London-based boutique fund manager has raised €640 million so far for a pan-Europe opportunity fund, but expects to close out next week on more as the finishing touches are made to final commitments.

Curzon Global Partners has raised €640 million ($960 million) for European Property Investors (EPI) Special Opportunities LP, but expects final commitments to be higher by the end of next week.

“Demand was so great that we didn’t have to and couldn’t have marketed this to anyone other than (existing) clients and friends,” Ric Lewis, chief executive officer, told PERE.

The pan-Europe vehicle, which is managed from London, held a first close in February at €215 million and has since added €425 million of subscriptions, giving it a total of €640 million in equity. However, the final figure will be between €750 million and €800 million when final commitments are gathered shortly.

This is a follow on to EPI LP which raised €769 million in 2004 targeting 16 percent triple net returns with leverage of up to 70 percent on pan-European investments. Around 45 percent of investments made out of that fund have been realized to date. The firm is expected to significantly outperform the investment target especially after selling a large German real estate portfolio last year at a multiple of three times equity.

The difference with this latest fund is that the investment mandate has been expanded. The vehicle will allow Curzon and its affiliate AEW Europe to invest in situations such as providing capital to public real estate companies in need of liquidity.

“The first time we raised an opportunity fund, we thought this would be a corporate divestiture fund – not quite a sale and leaseback fund but assets that companies would take off the balance sheet. In this fund we have given ourselves more latitude to do things that are real estate opportunistic,” said Lewis. He added that of the remaining 55 percent left in EPI LP, the company will probably sell 10-20 percent of the assets this year.