Morgan Stanley Investment Management has announced that its fund of funds unit Morgan Stanley Alternative Investment Partners (AIP) has raised $585 million for Morgan Stanley Global Secondary Opportunities Fund LP (GSOF), a fund dedicated to acquiring interests in private equity funds in the secondary market. The capital raised exceeded MSIM's initial $500 million target.

"This successful fund raise demonstrates how MSIM leverages its competitive strengths and draws upon the full depth of resources at Morgan Stanley to deliver compelling investment solutions to our clients," said Gregory Fleming, President of MSIM. "As an integrated platform participating in both the primary and secondary markets, AIP is well-positioned to employ its differentiated investment approach to take advantage of the expected growth in secondary opportunities."

The objective of GSOF is to target off-market secondary opportunities across the private equity spectrum, with an emphasis on small- and mid-cap buyouts, distressed and special situations funds. GSOF is expected to be diversified by managers, strategies, regions, vintage years and portfolio companies. Investors include existing MSIM investors and new limited partners, including endowments, foundations, public and corporate pension plans, family offices, insurance companies, and sovereign wealth funds.

"We think the market for secondaries is poised for substantial growth in 2010, and we believe that our solutions-oriented approach to secondary investing will continue to be attractive to both sellers and the general partners of the funds we purchase," said John Wolak, Head of Secondary Investing for AIP Private Equity Fund of Funds and Lead Portfolio Manager for GSOF.

"MSIM has been an active buyer of secondary interests through AIP's global core private equity fund of funds program, and through our dedicated fund, we will continue to focus on small- to mid-sized managers and the less efficient parts of the private equity universe."

GSOF is the second fund dedicated to secondary private markets that MSIM has closed this year. In March, AIP's Real Estate Fund of Funds team announced that it raised $370 million in commitments for Morgan Stanley AIP Phoenix Global Real Estate Secondaries 2009 LP (Phoenix), a fund dedicated to acquiring secondary interests in opportunistic and value-added private equity real estate funds.