The Urban Developer – Lowy, Alceon Team Up for New $450m Fund

Source: The Urban Developer

Ted Tabet

The Lowy Family Group has injected $75 million into new outfit Assembly Funds Management's first diversified property fund to invest into real estate equity and debt deals across all Australasia property classes.

Rich lister Frank Lowy becomes a founding investor in the property fund which is aiming to raise $450 million in a mix of debt and equity from high net worth investors.

He is joined by former Westfield chief operating officer Michael Gutman who has invested $10 million and Sydney-based private equity firm Alceon, which has put in $65 million pooled from its founders and domestic family office investors.

Assembly has completed the first close of its ADPF1 Fund, surpassing its initial target of $125 million with more than $150 million committed.

After this initial round of capital raising, the fund will aim to raise a further $150 million through equity and will target residential, industrial, commercial, leisure and retail assets.

“We have a unique combination of skills, agility, financial resources and experience within our partnership and investment team to source, analyse and invest in attractive real estate opportunities,” Assembly Funds Management chief executive Michael Gutman said.

Assembly Funds will sound out sectors overlooked by larger institutions as it spends about $450 million with a planned leverage of 40 per cent.

The Lowy Family Group will provide research and expertise on the retail sector from its Westfield days and highlight potential acquisitions if they meet the fund’s requirements.

Lowy built up the Westfield shopping centre empire in Australia in the 1960s, before expanding to the US, New Zealand and the UK.

The family had been winding down its involvement with the 58-year old shopping centre empire and last December secured the biggest deal in Australian corporate history — the $32 billion sale of Westfield Corporation, to European giant Unibail-Rodamco.

The family still holds a 4 per cent stake in the owner of the local Westfield platform, Scentre, but does not hold management positions as it now focuses on investing.

“This will be an important partnership for us to participate in real estate investment opportunities in Australia and New Zealand going forward and we, of course, have great confidence in Michael having been colleagues at Westfield for 25 years,” Lowy Family Group principal Steven Lowy said.

The fund has already secured a deal for two mixed-use residential projects in Sydney and Melbourne which involve lending and preferred equity.

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