Investing Trends

, seeking profits
amid the diminution in existent estate values, raised an additional
$2.5 billion for a planetary place monetary fund that volition put portion of
its assets in U.S. mortgage debt.

About one-half of the new money in the Particular Situations Fund
III will be spent in the U.S., Kingdom Of Spain and the U.K., arsenic well as
other developed marketplaces in Europe and Asia, said , joint planetary caput of existent estate investment for
Morgan Stanley. The remainder will be invested in emerging markets.

Morgan Stanley, like Blackstone Group L-P and Lone Star
Funds, is raising money to take advantage of a driblet in asset
prices following the collapse of the U.S. subprime mortgage
market. The second-biggest U.S. securities house programs to invest
$30 million to $100 million of equity per investment, mainly in
commercial place assets including offices, hotels, supplies and
industrial buildings.

''Before June 2007, working capital for existent estate was abundant
and cheap,'' Carrafiell, 43, said in a telephone set interview
today. ''Today it is scarce and expensive.''

About 20 percentage of the money raised, or $500 million, may
be invested in the U.S., said Carrafiell. Lewis Henry Morgan Stanley's fund
may purchase junior pieces of first , focusing on loans in
which the involvement disbursal is covered by rentals in place,
Carrafiell said.

'Dearth of Investors'

''There's A famine of investors for that portion of the
capital construction inch the U.S., sol you can accomplish tax returns you
haven't been able to accomplish for a decennary in the U.S. in
mortgage debt,'' he said.

''We've looked at purchasing from people that have got originated
the debt and ain it,'' said Carrafiell. ''We've also been
approached by Banks to squad up with them to supply that slice
of a new mortgage they're about to write.''

Morgan Francis Edgar Stanley also might supply working capital to existent estate
owners and developers through the purchase of preferable equity
or first balcony loans in which the loan-to-value ratio on a
property is less than 80 percent, Carrafiell said.

The monetary fund programs to put portion of its working capital in developed
Asian marketplaces such as as Japan, where economical growing have slowed.

''For Class Type A Tokio business office space, there stays a
significant undersupply,'' Carrafiell said. ''We volition look for
opportunities that return advantage of that mismatch of supply and
demand.''

Credit Mess Continues

Morgan Francis Edgar Stanley raised more than than one-half the new working capital from
non-U.S. investors. The new money conveys to $5.9 billion the
total equity raised for the Particular Situations Fund three since it
was formed in 2006, Lewis Henry Morgan Francis Edgar Stanley said.

Chief Executive Military Officer Toilet Macintosh said on April 8 he
expected the recognition crisis will endure ''a couple of
quarters'' thirster as it distributes to commercial existent estate,
subprime mortgages in Europe and U.S. midsized banks.

The collapse of the subprime marketplace in the U.S. have reached
its 8th frame or ''maybe top of the ninth,'' Macintosh said
before the company's yearly meeting, referring to the final
period of a baseball game game. Europe is inch the 6th frame and the
market for securities backed by commercial mortgages is
''probably in the fifth,'' he said.

Morgan Francis Edgar Stanley went on a place acquisition fling last
year. In May 2007, the company agreed to purchase Investa Property
Group, Australia's greatest business office owner, for A$4.7 billion, and
Crescent Real Number Estate Equities Co. inch the U.S. for $2.78 billion.

Last April, Lewis Henry Morgan Francis Edgar Stanley agreed to purchase 13 hotels in Japan
from All Japan Airways Co. for 281.3 billion hankering in what was
the largest-ever existent estate purchase in that country
by an abroad investor.

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