Return to search

Angelo Gordon attracts $356m for second European fund

The New York-based alternatives investor’s latest pan-European fund is on target to surpass its predecessor vehicle’s haul of $500 million, thanks in part to its recent backing from PSERS.

Angelo, Gordon & Company, the New York-based alternatives investor, has raised $356 million for its second Europe-focused real estate fund, AG Europe Realty Fund II.

The firm made two filings, one for $252.3 million and a second for $103.9 million, with the Securities and Exchange Commission this week.

In January, PERE revealed that Angelo Gordon was on the verge of launching the value-add fund and had targeted a total capital raise of $750 million.

It is understood the firm sourced capital from its roster of existing investors and will target an internal rate of return of between 18 percent and 20 percent on their behalf.

The Pennsylvania Public School Employees’ Retirement System earlier this month approved a $100 million commitment towards Angelo Gordon’s latest European real estate vehicle. The pension fund added that it was aiming to increase its allocation to real estate from its current level of 40 percent up to around 50 percent.

The same PSERS document said it also expected the Angelo Gordon fund to invest 30-40 percent of its capital in the UK; 15-25 percent in Germany; 10-15 percent in France and the Netherlands and the remainder in other western European markets such as Spain and Italy. Office buildings are to make up 40-60 percent of the portfolio, alongside sectors including retail, hotels, apartments and industrial. The fund’s strategy also includes investments in debt and real estate operating companies.

The pension fund said it saw the European real estate market as an “attractive macro-investment environment with prices still below peak levels and strong fundamentals including stable demand, low vacancy and limited new supply.”

Neither Angelo Gordon or PSERS were available for comment on the matter.

Angelo Gordon’s previous vehicle, AG Europe Realty Fund I, was launched in 2014 with an original target of $500 million but eventually attracted $570 million from investors. To date, 75 percent of the capital has been committed through 24 transactions.

The firm also bolstered its capital raising efforts in September with the hire of Damian Loveday, formerly of consultancy Willis Towers Watson, as managing director of investor relations. He is based in London and reports to Gareth Henry, managing director and global head of investor relations.