Colony Capital Inc. said it raised $1 billion for a new real estate investment fund, the latest in a string of funds formed in recent months to take advantage of a hot property market.
Los Angeles-based Colony, one of the nation's largest private real estate investors, said the fund, called Colony Investors III LP, will invest in U.S. and international properties, and public and closely held companies.
Investors in the new Colony fund include 40 of the largest U.S. public and corporate pension funds, endowments, foundations and family trusts.
The size of the Colony fund reflects strong investor interest in the booming U.S. real estate market, which is benefiting from a strong economy, high job growth and low interest rates. Prices for most property types have recovered from the deep slump of the early 1990s, and meet, or exceed, the lofty levels of the late 1980s.
Others who have formed large real estate funds in recent months include Lazard Freres & Co., which raised $1.52 billion, and Blackstone Group, which raised $1.1 billion.
Some of Colony's recent investments include a $75-million stake in self-storage owner and operator Public Storage Inc.; a $100-million interest in restaurant property financier Franchise Finance Corp. of America; and an agreement to buy Harveys Casino Resorts for $420 million.