Fortress closes $1bn real estate fund

The New York-based investment firm’s latest property fund hit its hard cap in approximately a year.

Fortress Investment Group has wrapped its latest opportunistic credit real estate fund, Fortress Real Estate Opportunities Fund (FROF) II. The fund, which the firm launched last year, was closed at its $1 billion hard cap.

Randy Nardone, Fortress' chief executive and co-founder, first mentioned the fund during an earnings call last May, and said the firm has closed on $250 million in commitments during a subsequent earnings call in July.

Approximately 50 percent of FROF II's commitments come from public and corporate pensions, endowments and foundations. Among the fund's limited partners are San Francisco Employees' Retirement System and State Teachers Retirement System of Ohio, according to PERE Research & Analytics.

Fortress has committed or invested 20 percent of the fund's capital in the US and Europe. Generally speaking, Fortress's credit real estate opportunities funds are focused on opportunistic investments in distressed and undervalued commercial real estate assets, primarily in the US and Europe.

FROF II is a successor fund to FROF I, which was launched in September 2011 and attracted approximately $625 million in commitments. Fortress' credit real estate funds have now been backed with $2 billion of new capital over the last 12 months.

Since 2003, the credit real estate team, which is led by Peter Briger, has deployed approximately $8 billion of capital in opportunistic real estate globally.