UNITED STATES - AEW Capital Management has raised $651m (€480.5m) for its latest commingled fund, AEW Value Investors II - significantly more than its original target of raise $500m.
Around 40% of the investors in Value Investors II were repeat investors from the original Value Investors I commingled fund.
Pension funds did contribute to this latest capital raising, including a $20m commitment from Los Angeles Police & Fire Pension System and an allocation from Arizona State Retirement System, alongside a $15m co-investment from AEW.
The seven-year commingled fund, with 60% leverage, is predicted to generate a net IRR return of 10-12% in a 4-5-year holding period.
The commingled fund manager has a three-year to find deals for the investment fund but is already off to a good start as AEW has either committed or invested 23% of the capital for the fund.
AEW has a value-added investment strategy for Value Investors II and, for the most part, will invest in existing assets to be improved through redevelopment, repositioning, releasing or recapitalization. That said, the fund does allow some new development.
AEW is looking to invest in office, industrial, retail and apartments. But only North American assets will be considered for the Value Investors II fund.
Most of these transactions are likely to be on the East and West Coasts where there is strong job and population growth.