LONDON-The former senior managers of Bank of America Merrill Lynch’s local Principal Investment group have formed Peakside Capital, which will take over two of the bank’s real estate funds and property management in Europe. The funds total about $600 million.
Peakside will take over the bank’s interests in the Merrill Lynch European Real Estate Opportunity Fund LP ($336 million) and the Bosphorus Real Estate Fund ($264 million). The bank will remain its limited partnership in both funds.
The bank wanted to get out of the real estate business, according to Jim Forbes, a bank executive. “(The bank) made the decision that the business of sponsoring real estate funds and direct real estate investments is not a core activity. We concluded that the best option, in our capacity as a limited partner in the funds and the owner of the proprietary assets, is to allow the Peakside team to continue to manage the funds and the legacy European real estate assets as an independent company,” Forbes said in a statement.
Peakside was created by the bank’s former European team of Roger Barris, Stefan Aumann, Boris Schran and Mark Fenchelle. The new company has employed 13 former members of the team, and plans to hire four more people. One new hire is Christoph Munte, formerly of Morgan Stanley, will join as general counsel and a member of the Peakside Management Committee. The company has opened offices here, the Cayman Islands, Switzerland and Luxembourg.
The company also signed a portfolio management agreement with an affiliate of the bank to manage a portfolio of European real estate investments. Peakside will also seek other private equity investments, deal origination and execution, asset management and fund management throughout Europe.
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