Starcrest Scores $277M Final Close of Second China Real Estate Fund

Private equity shop Starcrest Capital Partners has achieved a $276.5 million final close of its second China real estate fund, the Hong Kong and Shanghai-based company announced.

The vehicle’s limited partners include banks, endowments, pension funds, asset managers and family offices across North America, Europe and Asia. Starcrest disclosed it had raised $181 million in a previous close of the fund in February 2017.

Founded in 2010, Starcrest specialises in distressed real estate and special situations in China, and has total assets under management of around $475 million. The new vehicle, Starcrest China Real Estate Fund II, LP, follows the firm’s debut fund, China Real Estate Fund I, which raised $150 million by 2013.

Starcrest Raises Funds for Distressed Deals

“We are pleased to announce the final close of Starcrest China Real Estate Fund II and would like to thank our existing and new investors for their support and confidence in the Starcrest team,” said David Yeung, Managing Director of Starcrest in a statement. “We believe the strength of commitments received reflects confidence in our ability to deliver value and is a clear endorsement of our investment strategy toward China’s real estate sector.”

The firm has invested over $145 million of equity into five projects including retail, office and residential assets, all in the first-tier Chinese cities of Shanghai, Beijing and Shenzhen, according to its corporate website. Starcrest focusses on special situations where it can acquire distressed assets, including repositioning and refurbishing opportunities.

Chinese PE Firm Targets First-Tier Cities

The company’s projects include Starcrest Corporate Plaza, a 50,976 square metre office property in Shanghai’s Zhangjiang High-Tech Park, which Starcrest bought in March 2014, upgraded, and exited in May of last year. Starcrest continues to asset-manage the Xue Bao Mall, a prime 8,784 square metre retail property on Shanghai’s Huaihai Middle Road, which it purchased in late October 2012.

Yeung previously led real estate investments with Goldman Sachs’ special situations group. The firm’s other managing partners include Jeff Liu, who formerly served as managing director for the Hong Kong and Shanghai offices of Angelo, Gordon; Elvin Lim, previously head of corporate finance at Macquarie Global Property Advisors (MGPA); and Leo Jia, formerly deputy CEO at Shanghai-based developer Super Ocean Group.