"For the first time ever, investors in private equity real estate funds are selling significant interests in the secondary market, and as a result, we are finding tremendous opportunities to acquire high quality assets at attractive valuations," Joseph D. Stecher, CIO of AIP real estate fund of funds, says in the release. "We are focusing on best-in-class small- to mid-size fund managers globally as we seek to capitalize on several distinct advantages of investing in the secondary market, including the ability to avoid start-up costs and fees, accelerate investment programs and shorten time for realization and effectively value underlying asset portfolios."

According to the release, the objective of AIP Phoenix Global Real Estate Secondaries 2009 LP is to target off-market secondary opportunities in private equity real estate funds that offer "a sustainable strategy for generating superior returns across real estate cycles, an emphasis on strong real estate fundamentals and in-depth knowledge of local markets." AIP is the fund of funds division of Morgan Stanley Investment Management, and manages portfolios of hedge funds, private equity funds and real estate funds.

In its fourth-quarter 2009 results, announced this past January, Morgan Stanley company-wide reported that it had halved its real estate gross asset exposure from the prior quarter. The Q4 tally for gross asset exposure was $2.2 billion as of Dec. 31, down from $4.4 billion at the end of September. With $1.5 billion of contractual commitments added, the final tally was $3.7 billion, compared to a total exposure of $6 billion at the end of Q3.