Blueprint: Headline-grabbing fundraises at Ares, BGO and Lone Star; Aviva changes its strategic rules; Korean and Japanese investors look to ramp up their property exposures

A fruitful harvest

Real estate was no laggard at Ares, which has followed a record second-quarter fundraising haul with a new fundraising milestone in the sector. The Los Angeles-based manager closed Ares US Real Estate Opportunity Fund IV, its fourth North American opportunistic vehicle, on Monday with $3.3 billion in commitments. It is the largest real estate fund for the manager and the fourth-largest private real estate equity fund closed this year, according to PERE data. The news comes weeks after Ares said it raised a record $26 billion across all of its lines of business in the second quarter.

The close, along with capital raised for another opportunistic fund, Ares European Real Estate Fund VI, gives Ares $5.5 billion in dry powder to capitalize on upcoming debt maturities across the US and Europe. The firm expects to hold a first close for another fund, Ares European Property Enhancement Partners IV, by the end of the month. “We believe the mounting need for capital infusions to bridge gaps created by the deleveraging that has occurred over the past two years has yielded an attractive investable universe of high-quality real estate in desirable markets,” said David Roth, partner and co-head of Ares US Real Estate.

Two-part fundraise

PERE also revealed this week that BGO has completed its largest European capital raise to date, raising nearly €2 billion for BentallGreenOak Europe IV. The capital raise occurred in two parts: one for the main fund and one for the co-investment vehicle. The Miami-based manager launched Fund IV in October 2021 and closed on €1.46 billion for the main fund in May 2023, according to PERE data.

BGO spent the next year amassing €520 million in co-investment capital – the largest co-investment amount raised to date for the value-add fund series. The co-investment capital raise was driven in part by Fund IV’s investments in large-scale platforms, including Nordics-focused data center developer and operator Bulk Infrastructure and Italian logistics company Techbau. For more on the fundraise and where else Fund IV’s capital will be deployed, read the full story here.

Lone Star’s short stack

One manager not celebrating a record fundraise last week was Dallas-based Lone Star Funds. But the firm could demonstrate it was walking the talk when investing the proceeds of its seventh real estate opportunity fund, picking up a six million-square-foot UK portfolio of mostly industrial properties for around $750 million. It was the first deal made on behalf of Lone Star Real Estate Fund VII, which the manager closed after raising $2.7 billion in commitments – well short of its $6 billion target and the smallest of any fund in the series since its first iteration in 2008. The series’ sixth fund closed in 2019 with $4.6 billion.

Jérôme Foulon, Lone Star’s co-head of commercial real estate, told PERE the asset manager was “very happy” with the haul, but acknowledged liquidity challenges for investors amid inflation and high interest rates. Foulon framed the closure as a proactive move, enabling Lone Star to seize a buying opportunity as banks reduce their commercial real estate exposure, particularly in the US. “We are not afraid to come back to our investors if the capital is deployed in the next 15 months,” Foulon said. “We want to take advantage of the pressure on the financial system.”

Read the full story here.

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