UNITED STATES - AVP Advisors attracted $400m ($273.5m euros) of institutional capital, including pension fund assets, to a new type of commingled fund combining indirect investment with direct holdings.
Two of the bigger investors in the commingled fund were California Public Employees Retirement System (CalPERS) and California State Teachers Retirement System (CalSTRS) as they each invested $100m to gain a projected return of 13-15% net IRR.
American Value Partners Fund I is seen as having a new investment strategy as a portion of the capital is being invested in a fund of funds investment play which sees real estate managers raising capital from pension funds for the first time, while the remaining portion of the commingled fund will be involved in setting up joint ventures with companies making their first moves, backed by pension fund capital.
There are four investments held in the fund of funds strategy worth $260m if they close, as expected, by the end of February.
At the same time, the fund will invest in new proposition firms that have a specific niche or strategy, such as a company which has been developing office or industrial properties in a particular market for the past 30 years.
Overall, American Value Partners Fund I will only be investing in real estate in the United States but assets will be placed in a wide variety of property types, including the four core of office, industrial, retail and apartments, as well as specialist property types such as student housing, hotels and senior housing.
The commingled fund does also have a co-investment option for its investors worth $230m, but this capital is not considered part of the $400m of equity raised for the commingled fund.
Instead, this feature will allow the investors to commit additional capital to a specific strategy or commingled fund that an investor feels comfortable with.