Aetos plans $1bn equity haul for fund IV, holds $250m closing

The New York-based private equity real estate firm is expected to continue investing in Japan and China from the capital raised for its fourth opportunity vehicle.

Asia-focused private equity real estate firm Aetos Capital has made headway into its capital raising efforts for its fourth opportunity fund.

PERE has learned that the New York-based firm has held a first equity closing of $250 million for its incoming Aetos Capital Asia IV Strategic Partners fund, which has a fundraising target of $1 billion.

The platform, which is headed by former Morgan Stanley global head of real estate investment banking, Scott Kelley, would not comment on any fundraising matters, however it is understood to be aiming for a final closing of the vehicle shortly after the summer.

The vehicle is expected to enable Aetos to continue its strategy of investment in its core country Japan, where the firm has more than 80 staff, and in China. It is expected to run for seven years and is targeting a return of more than 20 percent.

Aetos started investing in Asia in 2001. Its first fund, Aetos Capital Asia I, closed in 2003 on $740 million and, according to sources familiar with the firm, is on course to provide an internal rate of return of more than 30 percent. This early success has led to the firm raising a further $2.7 billion across for its second and third vehicles which closed in 2005 and 2008 respectively.

Prior investors in Aetos funds have included California’s CalPERS and CalSTRS, the Kansas Public Employees Retirement System and the New York State Common Retirement System.

PERE caught up with Kelley recently to discuss the firm’s activities. While he would not be drawn on its fundraising, he did describe Aetos’ investment strategy. To read what he said see this month’s issue of PERE.