Benson Elliot's €700m equity for fourth big fund oversubscribed
The UK-based private equity real estate fund manager Benson Elliot has raised €700m for its fourth pan-European real estate fund, Benson Elliot Real Estate Partners IV (BEREP IV). With more than €75m of co-investments earmarked for the fund, the vehicle was over-subscribed at closing, exceeding its initial €600m target.
Capital was raised from around 30 institutional investors, including public and private pension funds, university endowments, sovereign wealth funds, insurance companies and family offices. The company said around 50% of the capital raised came from US investors, with 40% from European investors and the balance from the Middle East and Asia. 60% of investors had already invested in earlier Benson Elliot funds, said the company.
The fund has already completed nine transactions in six countries for about €800m, including buying hotels in Paris and Milan and other gateway cities, a shopping centre in Bologna and several office and residential assets in Berlin. The fund sold an asset on Berlin’s Kurfürstenstrasse to a fund backed by a professional German pension scheme and the Renaissance Hotel and Marriott Executive Apartments in Brussels to a European institutional hotel fund. The sales delivered an equity multiple of over 2.5x, the firm said.
Marc Mogull, Benson Elliot founder and managing partner, said: “As the events of the last week (Brexit) highlight, market uncertainty and change are constants in our world. However, our investors expect us to exploit the opportunities volatile markets present, whilst keeping a careful eye on risk exposure.”
He added, "So far, our new fund has acquired around €800m of assets across nine transactions, with a big chunk of that in Germany. We feel good about our exposure right now, not least the predominance of higher quality, income-producing assets in the portfolio. At times like these, there’s a great comfort in cash, especially with bond yields in continental Europe sitting below zero, and yields in the UK heading in that direction.'
Benson Elliot's stated objective is to offer its investors opportunistic returns with a value-add risk profile. "There’s no pressure to deploy, but we’d expect the new fund to be fully-invested in 18-24 months. We don’t plan to launch any other funds this year. We're monogamous – we like to run one fund at a time," Mogull said.
On Brexit, Mogull commented: "We need to see how Brexit plays out. We have a long-term focus, so we have the luxury of watching markets move over time. Right now, we’re focusing on the relationship between fundamentals and pricing. In times like these, they don't need to run in lockstep."
Founded in 2005, Benson Elliot Capital Management has over €1.5bn of equity under management.