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King Street Capital's Major Fund Close: European Real Estate Special Situations Fund II

London, June 30, 2025 – King Street Capital Management, a prominent global investment firm, has successfully announced the final close of its highly anticipated European Real Estate Special Situations Fund II (ESS II). This fund reached its ambitious hard cap of approximately $950 million in capital commitments within a compact timeframe of just 12 months.

Strategic Focus on Real Estate Opportunities

ESS II is strategically designed to target environments where traditional capital sources are retreating. The aim is to identify institutional-grade real estate opportunities that are available at especially attractive valuations. The fund will concentrate on core markets throughout Western Europe, with a strong emphasis on securing high-quality assets that are temporarily undervalued chiefly due to market illiquidity, rather than any fundamental issues.

In a marketplace often plagued by uncertainty, King Street’s ESS II stands out by offering flexible, asset-specific capital solutions tailored to meet the unique needs of borrowers. This includes strategies for value enhancement through repositioning efforts, specialized capital structure solutions, and active asset management initiatives.

A Diverse Investor Base

The appeal of ESS II has spurred a broad, internationally diverse investor base, stretching across continents including North America, Europe, Asia, and the Middle East. Notably, 50% of the funding commitments originated from previous investors in King Street’s earlier fund, showcasing strong investor confidence and loyalty.

Brian Higgins, Founder and Managing Partner at King Street, remarked, “The robust demand for ESS II is a testament to investors' faith in our innovative financing capabilities, especially relevant in a market characterized by a scarcity of transparency and liquidity.” He added that amidst notable market dislocation, there exists a clear trajectory towards recovery, positioning ESS II favorably to seize emerging opportunities in European real estate.

Adapting to Market Shifts

Paul Brennan, Partner and Co-Head of Real Estate at King Street, further elaborated, saying, “Our investment strategy is centered on the convergence of asset quality and complex market dynamics, allowing us to develop capital solutions for prime assets trading below intrinsic value due to prevailing market stress.” As traditional funding avenues contract, King Street finds itself increasingly capable of deploying flexible capital and accessing premier assets through proprietary, off-market channels.

The culmination of ESS II represents a crucial advancement in the elevation of King Street’s real estate platform. Recent successful investments such as the Four Seasons Rome, the historic Bauer Hotel in Venice, Room00, Arlington House in St. James, and Bravo! Students exemplify the firm’s unwavering commitment to sectors demonstrating structural resilience and sustained long-term growth potential.

About King Street Capital Management

Founded in 1995, King Street Capital Management is a global alternative investment firm managing assets exceeding $29 billion across both public and private markets. The firm integrates in-depth fundamental research with precise tactical trading expertise and distinctive sourcing capabilities to reveal market dislocations and mispriced opportunities across a spectrum of asset classes and capital structures.

King Street Real Estate specializes in both debt and equity investments, primarily focusing on special situations and thematic platforms. Their strategy aims to capture well-calibrated risk-adjusted investment opportunities within the capital structure of premier real estate assets situated in major markets. Over the years, King Street has executed transactions in excess of $20 billion within real estate securities and relevant investments.

For additional insights, visit www.kingstreet.com and follow King Street Capital Management and King Street Capital Real Estate on LinkedIn for updates and announcements.