NORTH AMERICA – Starwood Capital Group has raised $4.2bn (€3.2bn) of equity for its latest global investment fund, Starwood Distressed Opportunity Fund IX.
The final capital raise was much higher than anticipated.
According to a presentation made to the State of Connecticut Retirement Plans and Trust Funds in September 2012, the targeted capital raise was projected at $2.5bn-$3bn.
The real estate fund manager attracted capital from more than 75 investors.
Two of its significant commitments were $200m from the Teacher Retirement System of Texas and $150m from the Teachers' Retirement System of the State of Illinois.
Other investors included the New York State Teachers Retirement System, the State of Connecticut, Los Angeles Fire and Police Pensions, the Texas County & District Retirement System and the Public Employees Retirement Association of New Mexico.
The targeted IRR for investors in the commingled fund is 20%.
Fund IX will employ five strategies on assets in Europe and the US.
These will include distressed debt purchases, value-add and income assets, corporate opportunities, buying select hotels that have been undermanaged and undercapitalised, and, to a lesser extent, residential land investments.
Starwood began the process of investing the capital for Fund IX at the end of 2012.
Jerome Silvey, CFO at Starwood, said: "We have completed more than 20 investments both here and in Europe in the past months. We have already invested or committed approximately $2bn of equity capital in the US and Europe.
"The fund, like all Starwood vehicles, is diversified by product type and geography and includes interests in several bank loan pools, distressed debt, more than 3m square feet of office, 1m square feet of retail, 15,000 multifamily units and more than 150 hotel properties."
