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November 1, 2014

Morgan Stanley Reportedly Reviving Real Estate Unit

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Morgan Stanley Reportedly Reviving Real Estate Unit

Morgan Stanley is reportedly working to revive its real estate unit, Morgan Stanley Real Estate Funds (or Msref), after the fund faced billions of dollars in losses during the financial crisis a few years ago. 

Morgan Stanley will be aiming to raise $1 billion to $3 billion for the global property fund, The Wall Street Journal reports. 

“Morgan Stanley's effort represents one of the first by a major Wall Street bank to challenge the private-equity giants that recently have dominated private fundraising in the real estate world,” The Wall Street Journal reports. “Since the financial downturn, banks mostly have stayed on the sidelines, while firms such as Blackstone Group and Starwood Capital Group have raised new multibillion dollar funds to take advantage of improving property markets.”

Since 1991, Morgan Stanley’s real estate unit acquired more than $186 billion in property globally, but the firm suffered huge losses during the financial crisis.

In the past, James Gorman, Morgan Stanley’s chief executive, has said that he believes investing money in real estate funds to be part of the firm’s “core” business, but he added that the firm would be more cautious of how much money it invested in it as well as other risky businesses. 

Source: “Morgan Stanley Gears Up for Property Fund,” The Wall Street Journal (May 28, 2013)

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