This is not to say all of Morgan Stanley’s real estate investments are bad, but in on fund created at the top of the market, it is looking pretty bleak.
The Morgan Stanley Real Estate Fund VI International is losing money hand over fist. The fund invested in real estate all over the world and has an expected loss of 5.4 billion dollars, or 61% of the money raised.
This has got to hurt as there is no turnaround on the horizon for the commercial real estate markets.
Morgan Stanley, once the biggest property investor among Wall Street banks, expects to lose $5.4 billion, or 61 percent, of its $8.8 billion global fund, said a person familiar with the situation.
The firm sent a fourth-quarter update to clients in recent weeks showing the 2007 fund was likely to recover $3.4 billion of its investments, said the person, who declined to be identified because the information isn’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 targeting high-return real estate investments. via BusinessWeek
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It's not Morgan Stanley losing squat. It's the poor investors who sunk their retirement money into this fund. Probably at the advice of very well paid investment advisors at Morgan Stanley. But hey, he made his commissions getting in and getting the poor guy out.
This is really disaster from the point of view of the real estate investors that they have invested in this Morgan Stanley fund as this fund is expected to have suffered a loss of 5.4 billion dollars which is a very big loss.