Morgan Stanley took huge hit on real estate fund, report says

Morgan Stanley took huge hit on real estate fund, report says
Morgan Stanley Real Estate Fund VI International said to be down 61% -- not suprising, given the fund was raised at the peak of the property boom
APR 15, 2010
By  Bloomberg
Morgan Stanley, which once ran the biggest property-investment arm among Wall Street banks, expects to lose $5.4 billion, or 61 percent, of its $8.8 billion global fund from 2007, said a person familiar with the situation. The firm sent a fourth-quarter update to investors in recent weeks showing the fund was likely to recover $3.4 billion of the investment, said the person, who declined to be identified because the information wasn't public. A spokesman for New York-based Morgan Stanley declined to comment. Morgan Stanley raised the fund, Morgan Stanley Real Estate Fund VI International, toward the end of the property surge when market prices were at or near the peak. At the time, it was the largest private fund ever raised targeting high-return real estate investments. The expected loss was reported yesterday by the Wall Street Journal. Morgan Stanley invested its 2007 fund around the world, including Asia and Europe. In the U.S., the firm defaulted last year on a $2 billion loan to buy Crescent Real Estate Equities Co. in 2007 and handed over 17 million square feet of office buildings to lender Barclays Capital. Morgan Stanley agreed in 2009 to relinquish five San Francisco office buildings to its lender, two years after buying them from Blackstone Group LP. Once the second-largest U.S. securities firm, Morgan Stanley converted to a bank holding company in September 2008 and accepted $10 billion of government bailout funds to survive the credit crisis.

Latest News

Despite economic pressures, Americans aren't giving up their summer vacation plans
Despite economic pressures, Americans aren't giving up their summer vacation plans

Survey finds vacation confidence at an all-time high, defying budgetary constraints and ongoing inflation in travel costs.

New Jersey court says restitution and disgorgement can both be used in securities fraud cases 
New Jersey court says restitution and disgorgement can both be used in securities fraud cases 

A New Jersey appellate court reinstates regulators' ability to seek both restitution and disgorgement in a securities fraud case involving unregistered investments and diverted investor funds. 

UBS loses Ocean Capital lawsuit 
UBS loses Ocean Capital lawsuit 

A federal appeals court has sided with activist investors in a closely watched proxy battle involving nine Puerto Rico municipal bond funds.

Fidelity National's $250 million investment in F&G Annuities survives Delaware shareholder lawsuit 
Fidelity National's $250 million investment in F&G Annuities survives Delaware shareholder lawsuit 

Judge rejects shareholder lawsuit targeting Fidelity's preferred stock deal.

Fintech bytes: Zocks inks new tie-up, Fireflies enters the scene
Fintech bytes: Zocks inks new tie-up, Fireflies enters the scene

The newest advisor-focused AI notetaker arrives with a low-price pitch for enterprises – but is it too little, too late to gain market share?

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.