Angelo Gordon eyes $750m second Euro fund – Exclusive

The New York-based alternatives investor is expected to launch its second Europe-focused value-add fund in the coming months. 

Angelo, Gordon & Company, the New York-based alternatives investor, is to launch its second Europe-focused value-add real estate vehicle in early 2017, PERE can reveal, and will target a total fundraise of $750 million.

An investor with knowledge of the firm, said the fund, AG Europe Realty Fund II, will be used to target a range of properties in multiple sectors, including office, retail, industrial, hotels and residential, across western Europe and the UK.

It is understood Angelo Gordon will look to attract capital for the fund from existing investors and will target for them an IRR of between 18 percent to 20 percent.

Angelo Gordon was contacted, but a spokesman declined to comment on either the fund launch or the recent deals.

PERE has also learned that Angelo Gordon has sold two assets, in Dublin and Dusseldorf, for a total of €85 million on behalf of its first European-focused investment vehicle, AG Europe Realty I.

The first deal was the sale of the 132-room Temple Bar Hotel in Dublin for €55 million to an Asian buyer. It is understood the firm bought the asset for around €27.2 million in March 2015, before converting it into a 4-star asset and selling it for an approximate €25 million profit.

The second transaction was the purchase of the €30 million Muenster Centre in Dusseldorf. The 121,000 square foot mixed-use asset was understood to have been acquired by a German fund managed by Deutsche Bank. Angelo Gordon originally bought the property for €16.4 million and the deal generated a 1.8x multiple with an IRR of around 25 percent.

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

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

Angelo Gordon is currently marketing two other real estate funds: the 2014-vintage AG Realty Fund IX, which the firm has raised $1.14 billion towards the targeted $1.5 billion as of June 2016, according to PERE research, and its Commercial Real Estate Debt Opportunities Fund (CREDO) which has a target size of $750 million.