US firm defies crisis with €560m of fresh equity since crisis broke

Raising significant sums of equity for a private European real estate fund seems to be feasible even during an unprecedented crisis, judging by one firm at least.

Since the covid-19 crisis began, Ares Management has managed to sign up investors to Ares European Property Enhancement Partners III for total commitments of €560 mln, according to two sources.

The global alternatives firm headquartered in Los Angeles has held two closings for the fund with expectations that momentum will continue as it works towards a €1 bn target by the end of the year.

The firm declined to comment on fundraising activities but PropertyEU has spoken with a number of property professionals who disagree with the notion that fundraising has ground to a complete halt. Though firms are inevitably experiencing a slowdown or pause in decision-making from investors as the focus is on existing assets, there are some investors that continue to hold Zoom meetings about new fund investments and contractual agreements are being signed in some instances.

Ares’ European Property Enhancement Partners III pursues a value-added strategy. The predecessor fund closed on €665 mln in 2017.

The fund series is not to be confused with Ares’ opportunistic business in Europe. The most recent fund for that strategy, Ares European Real Estate Fund V, closed on €1.8 bn in August 2019.