Fortress confirms $800m capital raise

The New York-based alternative investment firm, Fortress Investment Group, has confirmed that it has reached the fundraising target of its debut Asia real estate investment fund.

New York-based alternative investment firm, Fortress Investment Group, has announced that it has reached its capital raising target for its first Asia real estate investment fund.

As tipped by PERE earlier this month, the firm, led by former head of Japan for DLJ Real Estate Capital Partners Tom Pulley, has raised $800 million for its Fortress Japan Opportunity Domestic Fund.

The yen-denominated vehicle was set up to invest primarily in real estate debt opportunities in Japan as well as other assets.

In its announcement, Fortress said it had already invested approximately $200 million of the capital in three transactions and is committed to a further investment which is expected to close by the end of the second quarter. The fund is expected to be fully invested over the next 12 months, the firm said.

Pulley, chief investment officer of Fortress Japan, said: “We believe that near-term pressures have created extraordinary opportunities in Japan. In 2009, we saw significant deleveraging by financial institutions, with sales of over $5 billion in non-core real estate-related assets.”

“We expect that figure to more than double in 2010. As we have seen in previous cycles, broad-based deleveraging tends to result in supply-demand gaps, volatility, and significant price distortions. As these dynamics play out over the next five years, we believe a historic investment environment will take shape for experienced investors in Japan.”

Daniel Mudd, Fortress’s chief executive officer, said: “Our local operations in Tokyo and our ability to leverage global corporate resources provide a significant advantage in sourcing, executing and managing complex investments in Japan and the surrounding region. We appreciate the confidence our limited partners have placed in us and we look forward to delivering strong investment results on their behalf.”