REAL ESTATE - Angelo, Gordon & Co recently finished the money raising portion of its latest commingled fund, AG Net Lease Realty Fund LP. The total amount of equity in the fund is $160m(€124m).
The alternative investment manager attracted a wide range of investors into the fund. These included endowments, pension fund and some high net-worth individuals. The commitments for this commingled fund were placed into three different asset classes. Some were real estate and others were fixed income and alternatives.
It is anticipated that investors in the fund will achieve a total return of 10% to 12%. Angelo Gordon and its employees were co-investors in the fund for $10m.
The commingled fund was over subscribed. Angelo Gordon had originally planned to raise a total of $150m. Managing director Gordon Whiting said: "We think these results show how many investors around the country feel about putting some capital into the net-lease product and about our strategy."
The company has already placed some of the capital into the marketplace. It has invested $40m of debt and equity into several deals. The properties are located in Massachusetts, Illinois, Ohio, Texas and Wisconsin.
The overall investment strategy will be to acquire net leased corporate real estate properties. The emphasis for the fund will be on properties owned by corporate sponsors and non-investment grade companies. The property types are office, industrial and retail.
The vast majority of the transactions for the fund will be on assets located in North America. The commingled fund does allow for 10% of the fund to be made up of properties outside of the continent. This would most likely be in Europe and Asia. Deal size for the fund could be from $5m to $200m.
There is a total capitalisation in the fund of $500m. This happens as Angelo Gordon & Co figures it will be placing up to 75% leverage on the fund. There is a three-year time limit to find all of the assets for the fund. The alternative investment manager thinks it will take 18 months to place all of the capital.
AG Net Lease Realty will not be a one time fund for the company. Whiting said: "We expect that this commingled fund will be the first of a series of net leased investment funds that the firm will have."