Apax Founder Plans $1B Long/Short Real Estate Fund

Apr 23 2007 | 9:21am ET

With many predicting a big turn south for the real estate market, a trio of private equity veterans is putting together a hedge fund to profit from a downturn.

Apax Partners founder Ronald Cohen, George Kountouris, the former head of Deutsche Bank’s real-estate p.e. group, and Nigel King, the former Salomon real estate chief, have founded Portland Capital. The new fund won regulatory approval in January, Financial News reports, and the founders are now in talks with potential investors, hoping to raise between £200 million (US$400 million) and £500 million (US$1 billion). In addition to the £30 million (US$60 million) committed by Cohen, Kountouris and King, the fund has already won the backing of Nathaniel Rothschild and Harry Solomon, the former CEO of foods group Hillsdown. Portland is aiming primarily for family offices and high net-worth investors, according to Financial News.

“I believe property is going through a big transformation at the moment,” Cohen said. “No one has found a way, as yet, to make money in a downward cycle and Portland will have the capacity to do this.”

Financial News reports that Portland is not the only long/short real-estate fund in the works, as both Kempen and Fortis are planning such vehicles.

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