JER raises $321m for co-managed Russia fund

J.E. Robert Companies and co- fund manager Alfa Capital Partners has attracted the European Bank for Reconstruction and Development as an investor.

J.E. Robert Companies, the US firm, and Moscow based private equity and real estate firm Alfa Capital Partners have raised $321 million (€231 million) for their co-managed Russia-focussed Marbleton Property Fund.

In a joint statement the pair revealed that the European Bank for Reconstruction and Development is a cornerstone investor in the fund.

Marbleton is JER’s platform in Russia, and will also scout investments in neighboring Ukraine. Though no details have been released, the fund has completed transactions in Moscow and St. Petersburg and has several more deals in exclusive negotiations, according to the firms.

Private equity real estate firms are pursuing numerous strategies to enter Russia, with many opting to form property development platforms with local partners. RREEF’s global opportunity fund and Morgan Stanley’s third special situations fund are among those to either buy minority stakes in Russian developers or form joint venture partnerships.

Marbleton says part of its strategy is to offer Russian developers and property owners a financing partner. Richard Sobel, chief executive of Alfa Capital Partners, said the fund was well positioned to offer a “value added solution for financing and executing property transactions and developing scalable partnerships.”

News of the final closing comes just days after McLean, Virginia-based JER announced the closure of its third European fund with equity commitments of €809 million ($1 billion).

JER Europe Fund III is concentrating on undervalued assets and value-added opportunities across all asset class sectors throughout the continent, with the exception of Russia. With leverage, it is expected to have total buying power of up to €4 billion making it one of the largest funds targeting the region. It easily surpasses the size of its second European fund, which closed in January 2004 on €123 million.

In a statement, the company said it has so far committed to 13 transactions for around €786 million.