GreenOak Is Said to Prepare New $1.1 Billion Real Estate Fund

(Bloomberg) -- GreenOak Real Estate LP has started talking to investors about a plan to raise a 1 billion euro ($1.1 billion) fund to invest in European properties such as warehouses, offices and homes, people with knowledge of the plan said.

The real estate private equity firm that’s principally based in New York and London will formally start raising money for its third fund in the first quarter of 2019, less than a year after wrapping up the fund-raise for a 656 million euros pool called GreenOak Europe II LP, the people said, asking not to be identified because the plan hasn’t been publicly disclosed.

The latest fund will have a similar focus to its predecessor, which has invested in real estate in Western Europe. The speed of the follow-on fund reflects the firm’s preference for raising smaller pools of capital and investing them fairly quickly, particularly because many markets in its area of focus are mature, one of the people said.

Founded in 2010 by a trio of Morgan Stanley veterans, GreenOak runs both equity and debt funds in the U.S., Europe and Asia. The firm’s second European fund is now about 70 percent invested and will likely be fully committed by the second quarter of 2019, two years after it began deploying capital. The fund completed a deal to buy 22 warehouses in France and Spain spanning about 1.8 million square meters in September.

A representative for GreenOak declined to comment.

The shift to e-commerce, which has boosted warehouse rents and values in the U.S. and U.K., is prompting opportunistic investors to buy and build in parts of Europe where online shopping has yet to take hold to the same degree. Such funds are luring pensions and insurance funds that are seeking to shift their allocations from retail properties that have been hurt by store closures and falling rents.

©2018 Bloomberg L.P.