Benson Elliot launched fundraising for the fund in April of this year, achieving an initial close of over €200m, in just seven weeks. The speed at which the firm has been able to raise one of the largest private equity real estate funds ever for a start-up independent manager is a reflection of Mogull’s reputation.
Mogull founded Benson Elliot in 2005 to continue his property investment activities in Europe, where he has worked for over fifteen years. Previously, Mogull was managing director and the senior real estate executive at Doughty Hanson & Co, where he established and ran the $632m Doughty Hanson & Co European Real Estate Fund, one of the first European private equity real estate funds.
Mogull left Doughty Hanson in mid-2005, after seven years with the firm, having led the fundraising of that firm’s debut real estate fund, recruitment of the real estate team and deployment of the fund in 20 separate transactions across Europe. The first Doughty Hanson real estate fund has been one of the most successful in Europe, with a gross realised IRR to July 2006 of 42%, an equity multiple of 3.1x and a portfolio value of over €2bn.
Mogull said: “Having enjoyed a long track record of investment success and market-leading returns, I’m excited by the prospect of establishing my own franchise and replicating that success with the exceptional team we’ve assembled around this fund. With the support of our cornerstone investors, and what I believe is the best professional talent in the business, we can create the leading mid-market private equity real estate platform in Europe.”
“This firm and this fund reflect a vision of how the real estate private equity industry needs to evolve to meet future challenges – management owned, sensibly sized, and with the interests of the Fund’s investors, the firm and the team aligned.”
“The events of the last year, leaving Doughty Hanson, setting up Benson Elliot and now closing our first fund, have been exhilarating. With the Firm and the Fund now up and running, the Firm’s principals look forward to delivering superior returns to our investors, year in and year out, through the inevitable ups and downs of the property cycle.”
The fund’s twenty institutional investors, from Europe, North America and the Middle East, include pension funds, foundations, endowment funds, family offices and funds of funds. Several of the Firm’s cornerstone investors have backed Mogull in the past. Amongst first time supporters much of the capital committed originates from within Europe. The principals and strategic advisers together have also committed over €7m to the fund.
Susan Meaney, Partner of Makena Capital Management, an investor in the fund, said: “We like Marc’s investment approach and value his experience, integrity and judgment. We’ve also been impressed by his determination to limit the size of the fund and to structure the firm and the fund as a true partnership amongst managers, investors and team. He and his team are in this for the long haul.”
Benson Elliot has made a series of announcements in recent weeks as it assembles a team of top investment talent, with a proven track record of sourcing and managing investments in the middle market. Amongst the senior professionals who have already joined Benson Elliot are: Trish Geery, previously managing director and head of global real estate for the Dubai Investment Group. A 10-year Goldman Sachs veteran, Geery was a key part of the team that built the Whitehall Funds’ franchise in Europe; Philip Irons, previously head of direct property transactions at Schroders Property Investment Management and, prior to that, head of acquisitions and disposals at Benchmark, a listed, UK-based property company; Leopoldo Andreis de Gregorio, previously vice president and director of Lehman Brothers Real Estate Partners, and that fund’s senior executive in Italy and Jeremy Hussey, previously chief financial officer of AIG Global Real Estate Investment for Europeand, prior to that, chief financial officer of Pelham Partners.
Benson Elliot also assembled an impressive team of strategic advisers, who will provide contacts, expertise and guidance in markets across Europe.
BEREP, a ten-year fund, will follow the disciplined, asset-driven investment approach established by Mogull at Doughty Hanson. The Fund’s team will target complex transactions in the European middle-market (total transaction value of €25 – €250 m), seeking assets across Europe that offer the potential for superior risk-adjusted returns through active and innovative investment management. The fund will acquire completed properties as well as funding development.
The fund will be distinctive in not having a single return target. Benson Elliot believes that arbitrary return hurdles can distort investment analysis, encourage excessive risk taking, and increase overall fund risk.