Angelo Gordon’s $1.5B Fund Targets European Assets

The company will use the equity commitments to pursue off-market, value-add deals across all property types.
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Alternative investment giant Angelo, Gordon & Co. has raised more than $1.5 billion in equity commitments for its latest European fund, AG Europe Realty Fund III. The fund will target off-market, sub-performing, value-add assets across all property types in the U.K., Western Europe and Nordic countries.

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Anuj Mittal, co-portfolio manager of European Real Estate, said in prepared remarks they anticipate COVID-19 will likely lead to new distress in the European commercial real estate markets. Mittal noted that significant levels of dislocation and distress have already been persistent across the continent driven in part by “political uncertainty, weak banks and sluggish economies.” He stated Angelo Gordon’s focus and approach to global real estate investing has been on buying transitional assets in places with strong fundamentals. That strategy along with a network of more than 40 operating partners with deep local knowledge will put the firm in a good position to select and capitalize on the most compelling investment opportunities in the region.

The New York-based firm said the fund received strong backing from existing investors and new global institutional investors and exceeded the $1.2 billion target and hit the hard cap. Adam Schwartz, co-CIO & head of real estate at Angelo Gordon, said in a prepared statement the level of support speaks to the talent of the team and industry expertise. Schwartz also pointed to the network of operating partners and said it creates a “distinctive edge when it comes to deal sourcing, improving asset performance and value creation.”

The previous fund, AG Europe Realty Fund II, closed in 2018 at more than $840 million. Since 2009, the firm has purchased more than 75 real estate transactions in Europe totaling more than $4 billion.

In September, Angelo Gordon raised $1.3 billion in equity commitments for an Asian fund, AG Asia Realty Fund IV. That fund exceeded its original target of $1 billion and also reached its hard cap. AG Asia Realty Fund IV is focusing on value-add turnaround and development opportunities in East Asia, with a strong emphasis on Japan, South Korea, mainland China and Hong Kong. The fund’s strategy was aimed at buying underperforming assets needing significant renovation, repositioning or lease-up.

The firm currently manages about $35 billion across the globe, with a primary focus on credit and real estate strategies.

Focusing on Europe

Other investment firms are putting money to work across Europe as well. In April, Blackstone closed its sixth European opportunistic real estate fund, Blackstone Real Estate Partners Europe VI. With a total capital commitment of $10.7 billion, it is the largest dedicated European real estate fund. At the time, Bloomberg reported it would give Blackstone about $30 billion in buying power. Blackstone executives also cited elevated volatility in the real estate markets due to the pandemic that could create strategic opportunities.