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NEW YORK CITY-With equity commitments tipping the scales at $1.75 billion, fundraising is now closed on Morgan Stanley's Real Estate Fund V US. According to a company spokesperson, some 60% of the funds gathered to date are invested.

According to the spokesperson, the fund's focus will continue to be direct plays and public to private moves. That model, of course, has made news throughout the year. Most notably, Fund V participated in the Town & Country merger earlier this year and more recently in its joint venture agreement last week with Duke Energy to buy into its Crescent Resources real estate subsidiary.

In that deal, 49% of the subsidiary will remain with Duke while an equal share goes to MSREF. The remaining 2% goes to Crescent's CEO. The unit has a mix of holdings throughout the Southwest and Southwest. These include country club communities, apartment and condo complexes and office assets. According to James E. Rogers, Duke's president and CEO, the deal reduces the energy firm's risk exposure in "non-core business" and frees it up, naturally, to focus on energy production.

The Town & Country merger with Magazine Acquisition was a $1.3-billion deal that was marked by months of offers and counter-offers before being resolved in March by TCT shareholder vote.

The fund is the fifth in a series of funds created by Morgan to invest in real estate assets, commercial and residential developments, and publicly traded or privately held real estate companies and portfolios. "MSREF V U.S. generated tremendous investor interest raising nearly four times the equity capital of its predecessor fund MSREF IV Domestic in 2000," states Michael Franco, the Morgan managing director who heads the fund.

Morgan Stanley Real Estate is comprised of three major global businesses: investing, banking and lending. Since 1991, the firm has acquired $87.7 billion of real estate assets worldwide and currently manages $50.9 billion in real estate assets on behalfof its clients.

Instant Insights /

Morgan Stanley Fund Raises Nearly $2B

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