Mon, 04 Mar 2013 | COMMERCIAL PROPERTY
Beny Steinmetz has created a $2 billion London-based venture focused on snapping up distressed properties in Europe.
The diamond mining entrepreneur and Israeli billionaire, Mr Steinmetz, has brought in Chris Papachristophorou, who was previously the head of real estate at Deutsche Bank’s fund management arm RREEF, to manage the business.
The business, called Invel Real Estate, will buy up offices and shops needing financial help and redevelopment, and will be run as a subsidiary of the Beny Steinmetz Group (BSG), which owns diamond, gold and nickel mines across West Africa and the Balkans.
BSG is to give Invel $400 million to get started. The business will then work on bringing in investors for individual properties, rather than going down the more traditional private equity fundraising route.
Mr Papachristophorou told the Financial Times: “A lot of people are wanting to invest in European real estate at the moment but are concerned by the eurozone crises and want some clarity on what they are buying. That means two things: they want to co-invest with people who know the market well and they want visibility over exactly which assets they are buying, rather than being in a commingled fund.”
The Europe-wide rise in poorly performing businesses in the recession and governments seeking to sell off properties to generate much needed capital, has proved to be highly attractive to US private equity firms and sovereign wealth funds over the past two years looking to expand their presence and increase their property portfolios.
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