Morgan Stanley Launches $370 Million P.E. Real-Estate Secondaries Fund

Mar 23 2010 | 3:29am ET

Morgan Stanley’s fund of funds unit has launched a secondaries fund that will invest in private equity real-estate funds.

The firm’s Alternative Investment Partners garnered $370 million in commitments for the Morgan Stanley AIP Phoenix Global Real Estate Secondaries 2009 fund. That’s nearly 50% more than the fund’s $250 million target.

The new vehicle will buy off-market secondary interests in opportunistic and value-added real-estate funds. It will seek out p.e. funds with sustainable strategies for generating returns, emphases on fundamentals and knowledge of local markets.

“For the first time ever, investors in private equity real estate funds are selling significant interests in the secondary market, and as a result, we are finding tremendous opportunities to acquire high quality assets at attractive valuations,” said Joseph Stecher, chief investment officer of AIP Real Estate Fund of Funds. “We are focusing on best-in-class small- to mid-size fund managers globally as we seek to capitalize on several distinct advantages of investing in the secondary market, including the ability to avoid start-up costs and fees, accelerate investment programs and shorten time for realization, and effectively value underlying asset portfolios.”

Strecher’s team is based in New York and London.


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