Invesco Real Estate has become one of the few managers to close on institutional equity for a closed-end European fund in 2023, PERE can reveal.

It is understood the Dallas-based manager has raised approximately €400 million for Invesco Real Estate – Europe Fund III, the latest in a series of pan-regional vehicles with a value-add investment strategy. The fund has a target size of more than €1 billion.

Investors in the round are thought to include re-upping institutions from Germany, the Netherlands and the Nordics. Subsequent fundraising rounds are expected to include investors from outside Europe.

The fund’s capital is anticipated to be deployed across real estate sectors, although it is not thought offices will feature heavily. Investments are expected to generate gross IRRs of about 15 percent and a 1.5x equity multiple.

The closing by Invesco Real Estate puts it in a rare cohort of managers that have successfully raised equity for a closed-end private real estate fund in the region this year. However, of the successful European raises, value-add has been the most fruitful strategy, as institutional investors look to participate in a broad reset of values in the market.

Ardian is another manager that has raised capital for the strategy. The Paris-based private equity firm, attracted €300 million for a first close of its European value-add fund, according to a PERE report last week.

Like Invesco’s, Ardian’s first-close investors hailed mainly from Europe, a notable feature at a time when European institutions are struggling to make new commitments to the asset class.

That chimes with a major takeaway from PERE’s 2023 Global Investor 100, our ranking of the largest private equity real estate investors, where European investors have dropped down the ranking following a lack of outlays and valuations eroding their equity exposures, as covered in an analysis published last week.

Invesco manages €83.8 billion of assets, according to the firm’s publicly available information, although the majority are characterized as core assets.