The New York-based alternative investment manager is now more than halfway to reaching its $1.2 billion target for the fund, which was launched this year. Limited partners include the Minnesota State Board of Investment, which committed $75 million, and the Pennsylvania Public School Employees’ Retirement System, which earmarked $100 million, according to PERE data.
If successful, Fund III would be Angelo Gordon’s largest-ever property vehicle targeting the continent. The firm previously raised $843 million for AG Europe Realty Fund II in 2017 and $570 million for AG Europe Realty Fund in 2014, according to PERE data. Fund II was generating a net internal rate of return of 7.3 percent and a multiple on capital of 1x as of December 31, according to PSERS documents.
With Fund III, Angelo Gordon is focused on investing in sub-performing and distressed real estate assets and debt with a value-add risk-return profile. PSERS documents showed that the targeted countries would be the largest and most liquid markets in Western Europe, including the UK, Ireland, the Netherlands, Germany, France, Spain, Italy, Sweden, Denmark and Norway.
The fund’s strategy is primarily focused on office, retail, residential, industrial and hotels, but may also include alternatives such as student housing, senior housing, self-storage and land. The vehicle’s capital is expected to be placed in 30 to 45 equity investments ranging from $15 million to $180 million in size.
Angelo Gordon has been investing in European real estate for 10 years and has spent $3.6 billion across more than 60 transactions. The firm’s 17-person investment team in the region is led by co-portfolio managers Adam Schwartz and Anuj Mittal.
Fundraising for Fund III follows Angelo Gordon’s closes on its latest US and Asia real estate vehicles earlier this year. The firm amassed $1.3 billion for its largest-ever Asia fund, AG Asia Realty Fund IV, in September and $2.75 billion for its largest-ever US fund, AG Realty Value Fund X, in May.