NEW YORK--(BUSINESS WIRE)--ALTO Real Estate Fund, which specializes in the acquisition of income-producing real estate assets located in the US, is headed by Co-Founders Mody Kidon and Yaniv Melamud. ALTO recently completed the third round of fundraising for its second fund, ALTO Fund II, which will ultimately total approx. $125 million.
ALTO Fund II includes capital commitments from institutional investors such as Ayalon Insurance Group, Gilad Pension Fund, and the provident fund of I.B.I. Investment House, which led a large consortium of other institutional entities, whose capital it manages through the subsidiary Amban.
ALTO Fund II, which was launched in February 2014, has raised approx. $100 million to date, almost half of which in the current round of fundraising. In light of this success, ALTO is increasing the capacity of its second fund to approx. $125 million. The capital committed by investors and with the use of leverage (“Each deal is leveraged at a rate of 60%-65%,” Kidon and Melamud clarified), the total investment value of ALTO Fund II is expected to be around $500 million.
ALTO to date has invested in about 23 commercial properties, with a value of approx. $530 million and a total area of about 3.5 million square feet (320,000 square meters). ALTO Fund II has acquired nine properties valued at approximately $156 million with a total area of about 1.6 million square feet (150,000 square meters). In addition, ALTO Fund II is set to acquire two more properties located in California and South Carolina within the next month.
Investors in ALTO Fund I have had about 60% of their initial capital returned
Alto Fund II, which is registered in the State of Delaware, is focused on investing in income-producing commercial real estate assets located in the U.S. According to Mody Kidon (an advertising executive and one of the owners of Gitam BBDO), who serves as Chairman at ALTO, “Our new fund is intended to provide a response to private investors who would like to invest in a similar manner to the large institutions in Israel and abroad, by diversifying their portfolio to include real investments.” ALTO CEO Yaniv Melamud added, “The situation in the US enables the continued acquisition of good properties, mainly in the second-tier cities, where prices are still attractive, given their late emergence from the long recession that still prevails in the US.”
ALTO has stated that it has made 11 exits in recent years with an average annual net IRR of 34%. Investors in ALTO Fund I, which has been running for about three years, have already recouped about 60% of the capital invested. Most transactions that ALTO executes, are in the $15-50 million range, after leveraging the capital raised by the company and its local partners in the US.
Chairman Kidon: “Our new fund is intended to provide a response to private investors who would like to invest in a similar manner to the large institutions in Israel and abroad, by diversifying their portfolio to include real investments.”