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Ares raises 1.78b euro Europe property fund


LOS Angeles-based alternative asset manager Ares Management has raised its largest European real estate fund yet, with plans to target distressed and poorly managed assets.

Ares EF V gathered 1.78 billion euros (S$2.73 billion) and will be managed by the firm's property unit, Ares Real Estate Group, headed by Bill Benjamin, company executives said on Monday.

About 40 per cent has already been committed to nine investments including a residential portfolio in Madrid and a mixed office-retail building in London that was previously owned by an investor from Saudi Arabia.

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"We favour residential and offices in major European cities, as well as logistics, an asset class that has benefited from problems in the retail sector from the growth of e-commerce," said John Ruane, partner and co-head of European Real Estate Equity at the firm.

The fundraising close comes as economic headwinds threaten European growth, potentially throwing up distressed opportunities that Ares's managers said they are experienced at spotting.

The latest worries for Europe's outlook came from Germany, where the government is preparing fiscal-stimulus measures in the event of a deep recession, according to people familiar with the matter.

The fund will focus on France, Germany, Spain and the UK, with projects also including 500 rental apartments in Dublin, Mr Ruane said.

Ares' real estate unit manages about US$11.9 billion in private equity and debt. The predecessor fund, EF IV, had a net 13.4 per cent internal rate of return as at June 30, according to company filings.

Separately, the firm is also looking to build its biggest-ever private equity fund with plans to raise about US$9.5 billion, targeting businesses in North America and Europe. The new pool will be a successor to the money manager's flagship private equity fund.

The firm, which oversees about US$142 billion across asset classes, was founded more than two decades ago. BLOOMBERG