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Tristan secures EUR170m at first closing of real estate private equity fund

Tristan Capital Partners has raised over EUR170m of commitments to a first closing of its real estate private equity fund, European Property Investors Special Opportunities 3 (EPISO 3).

The fund was launched to target investment opportunities being created by economic restructuring in distressed European markets where equity and debt capital are in short supply. 

Ric Lewis, chief executive of Tristan Capital Partners, says: “Tristan never subscribed to the prevailing market view during the Eurozone financial crisis that predicted the end of the EU and the European monetary union. To the contrary, we believe that the severe risk aversion of many investors, combined with an enduring shortage of equity and debt capital and a historically low volume of new developments, have combined to create a favourable investment environment in Europe. Furthermore, we think that prudent risk-taking by those with the capital, creativity, and discipline to avail themselves of the opportunities in coming months as Europe travels down a long and uneven path to economic recovery may be as good as we have witnessed in the last several years.”

EPISO 3 has an unleveraged target equity volume of EUR750m, but has completed an early first close just four months after its marketing launch with support from five previous institutional investor clients and two new clients.

The early first closing of EPISO 3 was held to provide capital for the acquisition of two assets (in the UK and Germany) for which the fund has secured exclusivity.

EPISO 3 will invest in western and central European markets across the office, logistics, retail and residential sectors. The fund’s strategy is to target investment returns of between 15 per cent and 18 per cent for a four to eight-year investment period and with a maximum leverage of 60 per cent loan-to-value.
 
Simon Martin, head of research and strategy at Tristan, says: “Tristan’s belief that the market opportunity in Europe that is emerging is now becoming more obvious in the value-added/opportunistic space, mirrors our view 18 months ago that there was a significant capital gap further down the risk/return spectrum in Europe between
core and opportunistic investment strategies.”

Tristan’s most recent fund Curzon Capital Partners III, a core plus fund, completed a final closing in February 2012 after raising EUR420m in equity. Tristan has since committed more than 70 per cent of this fund’s equity capital through 17 transactions and acquired over EUR1bn in assets across Europe since the inception of CCPIII.
 

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