Ares raises €1.1b for European value-add fund

Ares has raised $1.3 bn (€1.1 bn) at final closing for a new European commercial real estate fund with a value-add/opportunistic risk profile.

The Chicago-based alternative investment manager said that Ares European Real Estate Fund series has significantly exceeded its fundraising target of $1 bn, reflecting the strong interest in European real estate on the part of US institutions looking to take advantage of further rental growth and yield compression expected in Europe.

The $1.3 bn Ares European Real Estate Fund IV will target investments in residential, retail, office and industrial real estate located in major European markets, including the UK, Germany, and France.

In addition, Ares raised $824 mln for its Ares US Real Estate Fund VIII, which will target value-add investments in income-producing property types such as multifamily, industrial, retail, hotel and office in major markets across the US. The vehicle exceeded its initial target of $750 mln.

'The Ares European Real Estate team continues to be well positioned to meet the growing needs of our investors to find proven opportunistic investments through proprietary deal flow and we possess a long track record of successfully working with joint venture partners across Europe’s biggest markets,' said Bill Benjamin, senior partner of the Ares Real Estate Group.

Ares Management’s Real Estate Group manages a variety of public and private equity and debt strategies, with $9.6 bn of assets under management as of 30 September 2014 on a pro forma basis including these two fund closings. The group focuses on lending to and investing in properties that have been under-managed or need repositioning in core markets.