Crosstree raises €560m for 3rd special situations fund

London-based Crosstree Real Estate Partners has announced that it has raised £481 mln (€560 mln) at the final close of its Crosstree Real Estate Special Situations Fund III, exceeding the fund’s original target of £450 mln.

With approximately 25% of its capital deployed to date, Fund III will continue to opportunistically invest in UK value-add and equity acquisitions with an additional focus on subordinated debt financing opportunities.

Crosstree plans for the fund to be split somewhat evenly between the living sectors, hospitality and traditional sectors such as urban logistics, a portfolio composition similar to that of Special Situations Fund II.

Founded in 2011 by former Blackstone principal Nick Lyle, former Starwood Capital executive Sean Arnold, and in partnership with B-Flexion, Crosstree Real Estate Partners invests in projects across London, including office properties, retail and leisure space, hotels, and residential development.

B-Flexion was the exclusive investor in the first vintage of the Special Situations Fund, which totaled £400 mln of capital. Fund II closed in 2019 with £358 mln of equity.

The fund can invest both in equity and debt, but is expected to be more active in the lending space in the current market. 'As you would expect in an environment like this, there is a bit of a stand-off between buyers and sellers. As a consequence of that, we’re very much focused on the situations where people need to transact, and where we can help fill funding gaps,' Nick Lyle said.

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