UK & European buys Turkish RE interest

The London-based firm has boosted its exposure to European property by taking over what is believed to be Bank of America Merrill Lynch's position in the Bosphorous fund.

UK & European, the London-based private real estate investment firm, has acquired limited partner commitments of more than €50 million in a European fund.

The pan-European company did not reveal the fund or the fund interest but it is believed to be Bank of America Merrill Lynch’s interest in the Bosphorous Real Estate Fund 1, a Turkey-focused vehicle launched in 2005 for which the bank raised €204 million of commitments and made investments of more than €500 million of assets.

In a statement, UK & European said: “The investment includes fund participations with total commitments in excess of €50 million. It also forms part of UK & European’s expansion of its special situations business in Europe, which seeks to realise value in the medium and long term by providing short term liquidity to companies looking to exit European markets.”

It also follows the formation of a joint venture between the firm and German non-performing loan specialist Albulus Advisors last year. In that instance, UK & European committed €100 million to the investment program.

Merrill Lynch as one of the limited partners in Bosphorous has been looking to exit its investment as part of its global wind down of private equity real estate investments since it was taken over by Bank of America in 2008.

Management of the Bosphorous fund went to Merrill Lynch spin-out, Peakside Capital, in 2010, but last year the management transferred again to Resolute Asset Management, a London-based firm set up by former head of acquisitions at JER Europe, Bill Hancock.

For Merrill Lynch, the divestiture marks practically the end to its private equity real estate investments built up before it was taken over in the wake of the global financial crisis.  The former bank’s pan-Asia fund, Merrill Lynch Asian Real Estate Opportunities Fund, which raised $2.65 billion in 2008, is being managed by The Blackstone Group.