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Ares Raises $2 Billion Europe Property Fund, Its Largest to Date

Benjamin Robertson and Gillian Tan

(Bloomberg) -- Ares Management Corp. 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 ($1.97 billion) and will be managed by the firm’s property unit, Ares Real Estate Group, headed by Bill Benjamin, company executives said Monday. About 40% has already been committed to nine investments including a residential portfolio in Madrid and a mixed office-retail building at 68 King William St. in London that was previously owned by an investor from Saudi Arabia.

“We favor 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,” John Ruane, partner and co-head of European Real Estate Equity at the firm, said by phone.

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. On Monday, 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.

Dublin Deal

The fund will focus on France, Germany, Spain and the U.K., with projects also including 500 rental apartments in Dublin, Ruane said. Ares’s real estate unit manages about $11.9 billion in private equity and debt. The predecessor fund, EF IV, had a net 13.4% internal rate of return as of 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 $9.5 billion, targeting businesses in North America and Europe, Bloomberg has reported. The new pool will be a successor to the money manager’s flagship private equity fund.

The Los Angeles-based firm, which oversees about $142 billion across asset classes, was founded more than two decades ago.

--With assistance from Sridhar Natarajan.

To contact the reporters on this story: Benjamin Robertson in London at brobertson29@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, ;Alan Goldstein at agoldstein5@bloomberg.net, Josh Friedman, Vincent Bielski

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