Even as Ares Management’s planned merger with Kayne Anderson Real Estate Advisors fell apart in the last month, the Los Angeles-based firm has picked up fundraising steam for two new funds.
In its third quarter earnings results Tuesday, the firm said it held first closings for its second European value-add fund, with $377 million committed, and its second US opportunistic fund, with $179 million. Other US funds also picked up $103 million during the quarter.
The New York State Common Retirement Fund made a $350 million commitment that closed September 1, with an additional $100 million discretionary commitment, to the opportunistic fund, Ares European Property Enhancement Partners II, according to the pension fund’s report. Media reports said Ares is targeting a $600 million raise for the fund, with a hard cap of $900 million.
New York Common, the country’s third largest pension plan, has invested with the firm previously, committing $150 million to Ares European Real Estate Fund III, a fund from 2008, and another $200 million to Ares European Real Estate Fund IV, a 2013 fund.
In an April investor presentation, Ares said its European value add and opportunistic funds have returned 16 percent, and its US funds have returned 15 percent. The firm manages about $7.5 billion in US and European equity, according to its third quarter earnings report.
Ares has been busy in Europe this year: In September, the firm inked a €500 million joint venture to invest in value-add and opportunistic Iberian retail with pan-European real estate investment management company Redevco. In August, Ares agreed to acquire a 2.5 million square foot pan-European office portfolio from IVG Institutional Funds valued at more than €400 million.
In July, Ares announced its plans to acquire Kayne Anderson Capital Advisors’ real estate arm, but the merger fell apart last month as Kayne Anderson suffered losses in its energy-focused funds.