Fortress Investment Group has closed the Fortress Japan Opportunity Fund II (FJOF II) at its cap of JPY130bn, or approximately USD1.65bn.
FJOF II is a successor fund to the Fortress Japan Opportunity Domestic Fund (FJOF), which closed in June 2010 at its cap of approximately USD800m.
Fortress’s Japan opportunity funds are focused on investments in real estate-related debt and other assets in Japan. The funds seek to capitalise on dynamics related to significant deleveraging by financial institutions and near-term debt maturities: supply demand gaps, limited credit availability, price distortions, volatility and sales of non-core or distressed real estate-related assets.
As of 30 September 2012, FJOF made 23 investments, and Fortress estimated that FJOF’s portfolio would achieve a gross IRR of over 34 per cent. As of 30 September 2012, FJOF II had already made 10 investments with approximately JPY30bn of net invested capital. The fund is expected to be fully invested over the next 24 months.
“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,” says Thomas Pulley, chief investment officer of Fortress Japan. “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. We believe the Fortress team is well-positioned to capitalise on these opportunities on behalf of our investors.”
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