Morgan Stanley, the international leader in financial services, is reportedly gearing up to revive one of its property funds, Morgan Stanley real estate funds (Msref), to take advantage of a strengthening economy and property market. It hopes to raise capital worth $1 to $3 billion from potential investors for the global fund.
According to the Wall Street Journal, Msref executives have already entered into talks with various pension funds and prospective investors to contribute to the fund. It is hoping that China Investment Corp. will become the anchor investor of the capital pool.
Apparently, this fund would be the firm's eighth global pooled investment in real estate. During the financial downturn, the Msref had amassed huge losses. However, Morgan Stanley didn't stop investing in funds. In 2007, it had raised a whopping $8 billion in its sixth global real estate fund, but it lost most of that money in the real estate bust.
The seventh and current fund is worth $4.7 billion, which is due to mature in June and the firm hopes that it will reap good benefits this time, reports Bloomberg.
As the property market is improving and growing by leaps and bounds, Morgan Stanley hopes that the new fund will attract many affluent investors including major banks and financial institutions.
However, the firm will face some stiff competition from private equity companies like Blackstone Group LP and Starwood Capital Group, reports Fox Business. The Volcker Rule could also prove to be a limitation for Morgan Stanley as it prohibits banks from investing more than 3 percent of its money into funds. Moreover, since the fund had lost a lot of money during the crisis, gaining investor trust could become a little difficult for Morgan Stanley, reports WSJ.
For now, Morgan Stanley's annual investor forum, which was to be held in Shanghai, China, from May 21-23, has been postponed due to the outbreak of chronic bird flu in the country. The forum that will showcase major Asian hedge funds, will now be held in New York in July 2013.
