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Fortress hits $1.65bn hard cap for Japanese real estate debt fund

19 Dec 2012

Global investment manager Fortress has closed its second Japanese real estate-focused debt fund on its hard cap of JPY130bn ($1.65bn).

The firm said it expects to fully invest Fortress Japan Opportunity Fund II (FJOF II) over the next two years having already parted with JPY30bn across 10 companies through the vehicle.

Fortress closed FJOF II’s predecessor on its $800m hard cap in June 2010.

The firm estimates the fund’s gross IRR will exceed 34 per cent through its 23 investments.

Both funds are aiming to fill the gap left by financial institutions pulling out of the debt market and opportunities with existing debt coming close to maturity.

Fortress said that includes supply-demand gaps, limited credit availability, price distortions, volatility and sales of non-core or distressed real estate-related assets.

Fortress Japan CIO Thomas Pulley said, “We are very pleased with the success to date of our first Japan Opportunity fund, and we believe the environment remains historically attractive for disciplined, opportunistic investments in Japanese real estate-related debt and other assets.

“We anticipate that deleveraging and the disposition of non-core assets will remain at heightened levels in the coming years, and that significant opportunities will result for select managers.”

Fortress had more than $50bn of assets under management at the end of September on behalf of over 1,400 institutional clients and private investors.

Its diversified strategy includes private equity, credit, liquid hedge funds and traditional fixed income investments.

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