BGO Hits $5.1B Final Close of Japan-Focused Asia Value-Add Fund

North American fund manager BGO on Thursday announced the final closing of its Asia value-add strategy, with the real estate unit of Canadian insurer Sun Life having raised more than $5.1 billion in committed capital for the vehicle and co-investment sidecars.

BGO Asia Fund IV, targeting office, hospitality and logistics opportunities in Japan, South Korea, Australia and Singapore, represents the largest closed-end capital raise in the firm’s history, Miami-based BGO said in a release.

The strategy zeroes in on Japan, where regulatory reforms and corporate governance shifts are catalysing an estimated $3 trillion in non-core asset sales, according to BGO, which did business as BentallGreenOak until a rebranding last year.

“Japan is undergoing a profound transformation, and we see strong, sustained tailwinds across the region,” said BGO Asia chairman Fred Schmidt. “Tokyo is one of the world’s largest and most dynamic commercial real estate markets, and with growing pressure on Japanese corporations to optimise their corporate value, our deep roots and integrated presence positions us well to access opportunities others might miss.”

Diversified Investor Base

BGO Asia Fund IV received support from 45 institutional limited partners, with 44 percent of the capital sourced from the US, 24 percent from Asia, 23 percent from the Middle East and the rest from Canada and Europe, BGO said.

The firm didn’t disclose any specific LPs, but Mingtiandi reported last June that the fund had picked up a $100 million commitment from the pension system of Michigan. Meeting minutes released by the US state’s investment board revealed that the strategy would exclude mainland China and India to concentrate on Japan’s office, logistics, residential and hospitality sectors.

According to Thursday’s announcement, one-third of the commitments came from existing Asia fund investors who had previously invested in the strategy, one-third from longstanding BGO clients expanding into the value-add strategy, and one-third from new investors entering a BGO vehicle for the first time.

“We are honoured by the trust of our long-standing partners and pleased to welcome new investors who share our vision for capturing value across Asia’s most compelling urban markets,” said Marcus Merner, managing partner and head of Asia at BGO. “Our team, our consistent track record in Asia, our local expertise are important differentiators.”

History of Deals

Since its founding in 2010, the Asia fund series has invested $10 billion across 150 properties in 20 cities, according to BGO, which manages $86 billion in assets worldwide.

The fund manager snapped up Tokyo’s Avex Building, the headquarters of entertainment conglomerate Avex Group, at the end of 2020 for JPY 72 billion (now $500 million) and acquired the Rihga Royal Hotel Osaka in early 2023 for an undisclosed price believed to be at least JPY 50 billion.

Last month, BGO announced its acquisition of three Sydney warehouses for A$201 million ($129.6 million) under a joint venture with Aussie property investor Centuria Capital Group, adding to a salvo of recent deals in one of the world’s hottest industrial markets.

Cushman & Wakefield tracked more than A$1 billion in Sydney industrial volume during the first quarter of the year, up from just A$152.5 million at the same point in 2024.