Angelo Gordon & Co. has hit the market with its latest global opportunistic vehicle, AG Realty Fund IX, PERE has learned. The New York-based alternatives investment firm will target approximately $1.5 billion for the new offering, according to a source familiar with the situation. Angelo Gordon officials declined to comment.
Angelo Gordon will likely hold a first close for Fund IX at the end of the third quarter or the beginning of the fourth quarter, the source noted. Thus far, the fund has attracted interest from such institutional investors as public pensions, sovereign wealth funds and endowments and foundations. At its June meeting, the Oklahoma Teachers Retirement System (OTRS) placed Fund IX on a short list of five funds being considered for a potential opportunistic real estate commitment.
According to OTRS documents, Fund IX will follow a similar strategy to Angelo Gordon’s previous global opportunistic vehicle, AG Realty Fund VIII, targeting 20 percent returns and charging a 1.5 percent management fee. Through the fund, the firm will purchase underperforming and distressed assets in the four major property types as well as for-sale housing, nursing homes and self-storage properties. Investments are expected to require significant improvements from capital investment and leasing, and deals “may be attractively priced due to interrupted cash flow, constrained access to capital, complex deal structure or difficult/broken sale process,” according to the document.
Similar to Fund VIII, Angelo Gordon primarily will target large US markets for Fund IX. However, according to the source, Fund IX will have increased exposure to the European and Asian markets, as it will co-invest alongside the firm’s AG Europe Realty Fund and AG Asia Realty Fund III in those regions. AG Europe Realty Fund, which is targeting $500 million in commitments, held a first close on $91.75 million, while AG Asia Realty Fund III is aiming to raise $625 million.
Angelo Gordon closed Fund VIII on $1.27 billion in April 2012. Investors included the Nebraska Investment Council, the Montana Board of Investments and the Texas County and District Retirement System, according to data from PERE’s Research and Analytics team.
In March, Angelo Gordon held its latest close for a real estate fund, bringing in approximately $1 billion for AG Net Lease Realty III. The value-added offering focuses on the acquisitions of net-leased corporate real estate properties in the US and overseas.