Morgan Stanley Real Estate targets $10bn

The investment bank's private equity real estate arm is raising $10bn to take advantage of ‘distress and dislocation’ as its private equity arm raises a $6bn global fund.

Morgan Stanley Real Estate is on the road with a distressed real estate opportunities fund targeting $10 billion (€643 million).

The fund, called Morgan Stanley Real Estate Fund VII Global, will make global distressed investments, as well as target development opportunities in the emerging markets, with typical investments between $20 million and $1 billion, according to meeting minutes from the the Pennsylvania Public School Employees' Retirement System. The pension approved a commitment to the fund of up to $400 million.

MSREF VII will invest in the distressed real estate debt and equity of large corporations and government entities, as well as scout deals in China, India and other emerging markets where “the demand for quality real estate assets far outstrips supply”.

As of December 2007, the pension fund said, Morgan Stanley Real Estate funds had produced an aggregate gross IRR of 33 percent and a 2.4x multiple.

Morgan Stanley is also strengthening its private equity team worlwide as it raises a $6 billion global fund. Today the firm said it hired two European buyout executives from Apax Partners and Permira.