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Wednesday, September 29, 2010

Aetos Capital to raise $1 bln property fund-source

Aetos Capital, an investment management firm, plans to raise $1 billion for a fourth real estate fund to buy office buildings and condominiums in Japan and China, a person with direct knowledge of the matter said.

Aetos Capital plans to raise the money by December and has already gathered $250 million from investors, the person said, on condition he was not identified.

Aetos joins other big real estate buyers starting funds to purchase properties in Japan on the expectation that falling real estate values will rebound.

Price declines are slowing, according to the Japan Real Estate Institute. At the end of March commercial property values in central Tokyo had contracted by only 2.4 percent from six months earlier, compared with a 6.5 percent drop over a year, the research company said.

Fortress Investment Group (FIG.N) set up an $800 million Japan fund in June, while Morgan Stanley (MS.N) in the same month established a $4.7 billion pool of cash to buy properties around the world, including Japan.

Scott Kelley, Aetos Capital Asia LLC's chief executive, declined to comment on the latest fund raising.

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