MGP-Zebra Environmental Property Fund

The MGP-Zebra Environmental Property Fund LP (collectively the “Fund”) is a private equity fund focused on real estate investments in which environmental complexity leads to discounted prices and opportunities for attractive equity returns. Fund projects typically also create significant environmental benefits by performing accelerated clean-ups, and by preserving green areas through the re-use of existing brownfield industrial properties. The Fund’s investment strategy provides what is called a “double bottom line”, i.e. including both financial profits and societal benefits.

The general partners of the Fund, Bruce-Sean Reshen and Peter Hornick, both have significant experience in property investing and in environmental clean-ups. Both were Managing Directors of the $800 million Quantum Real Estate Fund, run by George Soros. Mr. Hornick subsequently established and managed the Zebra Property Fund, a $50 million fund that has invested exclusively in environmental properties, with Zurich insurance as the lead investor. Mr. Reshen managed the Dames & Moore/Brookhill Fund, a $200 million fund with a similar strategy. Mr. Reshen is CEO of The MGP Group, a major environmental brownfields consulting firm, providing services to government and private sector companies.

The Fund is presently in discussions with fund managers for five of the ten largest public and university pension systems in the United States. The Fund will initially be capitalized with several hundred million dollars of equity capital, leveraged with debt capital in the ratio of approximately 1.5 to 1. The scale of the Fund will be set during the second half of 2005, after the Fund has determined which states and markets to enter, and the likely scale of these investment markets.

Investment Process

The Fund targets attractive investment opportunities in the redevelopment of land at former industrial facilities, retired military bases, and closed landfills. Some of these projects involve real estate that is environmentally impaired. Other projects involve real estate that is relatively clean, like closed landfills, but which are perceived as having environmental risks. In addition, the fund will act as a contract purchaser of brownfield properties or portfolios of properties for REITs and publicly held firms that prefer not to purchase brownfields until remedial activities have been completed. The fund will also purchase brownfield assets in bulk that may become available as surplus properties in an acquisition or merger.

Upon acquisition, the Fund utilizes its expertise in real estate, development, zoning, insurance, environmental clean-up, and environmental risk management to redevelop the sites and maximize the value. In order to efficiently manage the redevelopment of multiple sites, the Fund plans to enter into agreements with the EPA and various state regulatory groups to ensure the safe and swift remediation and redevelopment of the sites.

The investments typically involve $5 – $35 million of equity in a single asset, with a holding period of 5–7 years. In order to efficiently deploy its capital, the Fund generally acquires pools of properties, working with state and federal agencies. The Fund is presently in discussions with several states and federal agencies to identify likely pools of properties.

Contact Information

Requests for more information should be directed to: