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NEW YORK CITY-MSD Capital, which, according to a source close to the firm, has in excess of $9 billion in assets under management, earmarks $1 billion toward real estate acquisitions. The firm has signed on Barry A. Sholem to head up the real estate endeavor and made an initial acquisition–taking the Four Seasons Maui at Wailea. The investment firm based here exclusively manages the capital of computer giant Michael Dell and family.

The seller requested that the purchase price not be disclosed; however, the fund intends to focus on acquisitions with a minimum of $25 million. Opened in 1990, the 377-room resort features 15 acres of Wailea oceanfront.

Sholem, the former chairman and co-founder of DLJ Real Estate Capital Partners, has overseen real estate acquisitions in excess of $6 billion over a 24-year career. He was also head of the real estate principal investment area and real estate investment banking on the West Coast for Goldman, Sachs & Co. He will be based in Los Angeles.

John C. Phelan, a managing partner of MSD Capital, says the new venture complements current investment activities in publicly traded securities and traditional private equity. According to Sholem, while a bicoastal team will look to identify investments requiring a minimum of $25 million, they will consider smaller sizes depending on the particular investment profile. “Our goal is to establish a flexible, long-term vehicle that will invest up and down the spectrum of risk-adjusted returns within the real estate industry,” he says. “We want to separate ourselves from the traditional opportunity fund model by offering a more patient and user-friendly co-investment vehicle for real estate operating partners throughout the world.”

MSD Capital was founded in 1998. It currently has approximately 70 employees in its New York and Los Angeles offices.

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