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Angelo Gordon raises $1.3bn for its biggest ever Asia RE fund – Exclusive

The New York-based real estate firm has exceeded the original target for its latest opportunistic real estate fund by $300m.

Angelo Gordon has hit the $1.3 billion hard-cap for its fourth and largest Asia real estate fund to date.

The firm has wrapped up fundraising for AG Asia Realty Fund IV, the latest vehicle in its flagship opportunistic series, within 12 months of its first close in November 2018, according to sources involved in the fundraising. PERE understands the fund corralled around $700 million last November, shortly after it launched in the summer of 2018 with a $1 billion capital raising target.

The sources told PERE that the majority of investors in the AG Asia Realty Fund III had re-upped into the new fund. According to PERE data, US pension fund the Minnesota State Board of Investment has doubled its investment in Fund IV to $100 million, having previously invested $50 million in both Fund II as well as Fund III.

The latest fund has also received a $100 million commitment from Los Angeles County Employees’ Retirement Association and $15 million each from two other US pension funds: Sacramento County Employees’ Retirement System and Seattle City Employees Retirement System.

AG Asia Realty Fund III, was closed at $850 million in December 2016, exceeding its initial target by $100 million, according to a report by PERE. It is understood to have been fully invested in the last quarter of 2018. According to a quarterly report published by Minnesota State Board of Investment in December 2018, Fund III was generating an IRR of 16.49 percent.

Like its predecessors, Fund IV is a higher returning vehicle targeting an IRR of 20 percent. The fund will be sector agnostic and will look at value-add turnaround and development opportunities across major markets in Asia, with focus on investing in Japan, South Korea, Hong Kong and China, according to sources close to the situation. PERE understands that Fund IV has so far completed eight transactions in the region.

Speaking specifically about the opportunities in Japan, Wilson Leung, head of Asia real estate at Angelo Gordon, told PERE: “In Japan, our focus has been in two areas: one is buying grade B office buildings in major cities and the other is logistics. We continue to find Japan attractive because of our ability to source off-market deals that are typically undermanaged or in need of renovation, which is where we believe we can add value.”

PERE understands the firm has purchased more than $500 million of logistics properties in Greater Tokyo and Osaka in Japan.