UNITED STATES - ING Clarion Partners has signed $202m through the capital raising on its latest commingled fund, Clarion Development Ventures III, following support from seven institutional investors, including New York State Teachers Retirement System.

The value-added fund will now take the fundraising and invest it over a three-year period which will hopefully tap market growth once the economy picks up again, according to Doug Bowen, director with ING Clarion and the portfolio manager on the fund.

β€œWe think this commingled fund is timed well for where the marketplace is sitting now. The work being done for either new developments or value-added plays will be completed when the economy starts to turn around,” said Bowen.

The fund - now worth $600m once 60-70% leverage is added - currently holds one asset: a 104,000 square foot office development project in Redmond, Washington which is in pre-leasing stage.

ING Clarion has made a $12m equity investment in the project and around one-third of the space has been pre-leased, including 30,000 sf to Group Health as its regional headquarters.

There is a three-year investment period on Development Ventures III which starts from the first closing on the fund and is being developed to hold a diversified US value-added portfolio, according to Bowen.

β€œWe will be investing in the four main property types and hotels. There also might be some situations where we take a look at buying some land held by distress owners. Another possibility is becoming a new equity partner in an existing partnership.”

Investment transaction size is expected to be between $5m and $35m while projected returns for investors in the commingled fund are a 16-18% net IRR over a three-year holding period.

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