Kailong Real Estate Investment has promoted Don Tan to managing director of fund management, just three months after the private equity firm reached a final close of $575 million on its second US-dollar denominated, China-focused property fund.
Based in Kailong’s office in Central under Hong Kong CEO Ivan Ho, Tan’s promotion comes as the firm concentrates on its Greater China Real Estate Fund II strategy post-fundraise, with a focus on maximising returns to investors.
Now in his sixth year at the Warburg Pincus-backed firm, in his new role, Tan will continue to lead the structuring of Kailong’s investment vehicles, while also assisting with fund raising and overseeing the ongoing management of the firm’s offshore vehicles.
Pulling in Commitments from Global Players
Kailong’s fund raising for its Greater China Real Estate Fund exceeded the company’s original target by more than 30 percent, with the firm securing European insurance titan Allianz as its anchor investor in the process.
Allianz announced in October 2018 that it had committed to taking a 35 percent stake in the closed ended fund at an investment then estimated at $175 million, with sources indicating that this value has been upsized according to the final amount of the fund.
Kailong has a track record of bringing aboard heavyweight capital partners, with Mingtiandi sources indicating that Franklin Templeton Investments, Partners Group and The Townsend Group backed the first iteration of Kailong’s US dollar fund series, Greater China Real Estate Fund I.
With Fund I on track to deliver its targeted returns of 18 percent, the majority of investors re-upped for Kailong’s second offering, according to Tan, while the company has enlarged its investor base to include US, Asian and European pension funds, global multi-managers, as well as Asian, European and Middle Eastern family offices.
Diversifying Beyond Core Business
With around 95 percent of the firm’s $1.8 billion in assets under management in Greater China, Tan says that KaiLong’s core business is firmly entrenched in Hong Kong and the mainland.
However, the newly appointed managing director told Mingtiandi that Kailong had previously executed investments outside of its core markets.
Tan revealed that the company had invested in a riverside redevelopment project in central London last October that could potentially grow into an equity commitment of £120 million ($154 million).
With a view to securing planning permission for the Thames-side redevelopment, Tan said that Kailong has partnered up for the project with a local developer.
Located in the London Bridge area within walking distance of the Shard, Tan added that Kailong was keen to lock down an attractive opportunity.
In 2015 Kailong invested in a pair of joint ventures with UK flexible space operator Office Space in Town (OSiT) which purchased four London serviced office buildings. Kailong later sold the portfolio in 2018 for £160 million, delivering a net return to investors of 20 percent.