Shore Capital Group, a UK investment bank, plans to start a US$500 million ($655 million) fund to scoop up Europe real-estate assets hurt by the US sub-prime mortgage crisis.
"The dislocation in the financial markets that we've seen in the past few months points to an amazing opportunity,"
chairman Howard Shore said yesterday.
"Our job is to separate the good from the bad, what is real value and what appears cheap."
Record foreclosures on US home loans to people with poor credit have caused a surge in borrowing costs and a plunge in the value of many securities related to mortgages. The fund, starting in 2008, will focus on central and eastern Europe, Shore said.
It will be called the Puma European Opportunities Fund and invest in assets including real estate. Shore will put US$25 million into the fund that Ralf Noecker, formerly a managing director at Bear Stearns, will manage.
Lehman Brothers, the fourth-largest US securities firm, will invest US$50 million for a 10 per cent stake.
Shore, who in May 2006 liquidated a UK real-estate fund after it beat its targets, said the biggest drop in UK house prices in 12 years this month is the beginning of a price correction.
The fund will focus on commercial real estate and steer clear of baskets of collateralised-mortgage securities, Shore said.
- Bloomberg
