Angelo Gordon & Co. has closed on nearly $2.3 billion through two commingled vehicles targeting real estate assets in North America, PERE has learned.
Sources familiar with the matter have confirmed that the New York-based alternatives investment firm has closed on $1.27 billion in equity commitments for its opportunistic vehicle, AG Realty Fund VIII earlier this year. In addition, Angelo Gordon closed on $1.01 billion for its value-added and AG Core Plus Realty Fund III on 30 March. Both funds were launched in early 2011.
Through AG Realty Fund VIII, the firm is targeting distressed commercial and residential properties or debt from owners and lenders, according to documents from The Nebraska Investment Council, which committed $25 million to the vehicle. The majority of acquisitions are to be US assets, but the fund is allowed to invest up to 25 percent of its capital in Canada and the UK.
Fund VIII is targeting a net IRR of 20 percent, according to Nebraska’s investment arm. There is a 9 percent compounded preferred return for limited partners.
The AG Core Plus Realty Fund III is a value-added real estate vehicle targeting “high-quality, in-fill assets where sub-performance can be corrected and which are likely to appreciate over time”, according to documents from The Pennsylvania Public School Employees’ Retirement System, which committed $75 million to the fund. In addition, with Fund III, Angelo, Gordon plans to “invest with local operating partners in high-quality office, retail, industrial and multifamily properties located primarily in the top 15 US markets.” In addition, up to 25 percent of the vehicle may be invested outside of North America.
Angelo Gordon’s core-plus fund has a target net return of 12 percent to 13 percent, with 6 percent to 7 percent of the total expected returns to be derived from income. AG Core Plus I currently has a net IRR of 18.2 percent, while Core Plus II currently has a net IRR of 3.3 percent.
Representatives from Angelo Gordon could not be reached for comment.