Asana targets $800m for second fund despite weakness of US retail

Asana Partners, set up in 2015 to invest exclusively in retail real estate in the US, expects to raise $800m (€681m) for its second fund.

New Mexico State Investment Council (SIC) said it had approved a $75m commitment during a recent council meeting.

Asana Partners held a first close last month, raising $240m and hopes to raise $800m eventually.

Its ability to raise capital is notable at a time when large parts of the US retail market are struggling due to changing consumer habits.

The board of New Mexico SIC debated the rationale of investing in a retail-only fund and one council member voted against the action.

New Mexico SIC invested in Asana Partners’ debut fund last year and said its initial returns had been in the top quartile on a vintage-year comparison.

The institution also said Asana Partners avoids big-box retail, where much of the stress in the market is taking place, and focuses on assets in urban areas that are supported by positive demographic trends.

Assets are typically multi-tenant retail buildings, retail-driven mixed-use buildings and condominium interests in mixed-use buildings.

New Mexico SIC is underweight retail – 16.7% of its real estate portfolio consists of retail holdings. Most core property funds in the US, as measured by the NCREIF ODCE benchmark, have 19.7% of their holdings in the sector.

New Mexico SIC also approved a €75m commitment to Aermont Capital Real Estate Fund IV, which invests in distressed assets in Europe.

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