Invesco closes $750m fund– Exclusive

Invesco Real Estate went over its $500 million hard cap for its latest US value-add vehicle.

Invesco Real Estate has closed its latest value-add fund at a hard cap of $750 million in the last several weeks, PERE can reveal.

The real estate arm of Atlanta-based asset manager Invesco exceeded its $500 million target for Invesco US Value-Add Fund IV. The firm has a 15 percent gross return target for the fund, a source told PERE.

Invesco held a first closing for the fund in June 2014 on $140 million, according to a filing with the US Securities and Exchange Commission. Investors in the fourth fund included Teacher Retirement System of Texas, which invested $200 million; Contra Costa County Employees’ Retirement Association (CCCERA), which allocated $35 million; and San Mateo County Employees’ Retirement Association, which committed $30 million, according to PERE Research & Analytics.

According to CCCERA, the firm plans to invest in two types of real estate through the fund: “broken core,” which are core assets in primary markets with problems to be fixed, and “inefficiently priced commodity” properties that are located in non-primary markets. The latter properties are “underpriced to an extent that the stabilizing yield (after the property is repositioned) represents a premium to the exit capitalization rate,” according to CCCERA.

Invesco US Value-Add Fund III had a gross internal rate of return of over 18 percent and a multiple of 1.8x as of June 2014, according to CCCERA.

The firm’s latest publicly-disclosed real estate transaction was the purchase of a 90 percent interest in six Florida logistics properties totaling 676,378 square feet from Easton Group for an undisclosed price, according to real estate data provider Real Capital Analytics.

Invesco, Invesco Real Estate’s parent company, had $740.0 billion in assets under management as of February 9, according to the firm’s website.