Private equity real estate firm Gaw Capital Partners has successfully raised more than US$1 billion for its latest fund, as the Hong Kong-based firm prepares to ramp up its property investments in Greater China.
Gaw Capital announced the final close of its fourth China real estate fund, Gateway Real Estate Fund IV last week after the fund reached its hard cap size of US$1.025 billion. The fund is said to be the largest fund ever for this family controlled investment firm.
Private Equity Rushes into China Real Estate
With the close of this fund, Gaw Capital joins in a rush of private equity firms eager to invest in real estate assets in Greater China and Asia. Blackstone Group has been raising a $4 billion Asia real estate fund, and private equity pioneer KKR announced in July that it had closed a $6 billion Asia investment fund which would also target property investments.
While this surge of fund raising is certain to increase competition for real estate assets in China, Gaw can already claim some success in the country’s commercial sector. Earlier this year, Gaw Capital purchased the Cross Tower in Shanghai from Ascendas of Singapore for RMB 1.67 billion.
However, Gaw’s international competitors have also been actively shopping for assets, with Carlyle Group investing $400 million into logistics developer Yupei during August, and Sam Zell’s Equity International investing into the Redwood Group during the same month.
Competing to Raise Capital
Commenting on the firm’s success in recruiting investors to join its funds, Goodwin Gaw, Chairman and Managing Principal of the company said, “The success of our fundraising efforts is a vote of great confidence in our successful track record of returns for our investors and in our unique investment strategy.”
Gaw Capital Partners currently manages four real estate funds targeting the Greater China and Asia Pacific region and during September launched Gaw Capital USA, with the goal of raising US$500 million to invest in US commercial real estate.
According to a statement from the company, Gaw Capital Partners has raised equity in excess of US$3.387 billion since 2005 and currently commands assets of US$ 7.1 billion under management encompassing residential developments, retail centers, hotels and commercial properties.
For this latest fund Gaw says it intends to hold its assets for four to seven years after investing.
Global Investment into China and Asia
Investors in Gaw’s Gateway Real Estate Fund IV include sovereign wealth funds, endowments, pension funds and other institutional investors. According to the company, institutional investors in this latest fund come 40% from Asia, 30% from North America, and 30% from Europe.
Geographically, Gateway Fund IV’s focus will be on gateway primary cities in Greater China, including Beijing, Shanghai, Guangzhou, Hong Kong, Macau and Taipei, as well as secondary cities in wealthy areas of China such as Jiangsu Province.
The fund managers say their goal for Gateway Fund IV is to invest at least 80 percent of their capital in Greater China with the remaining 20 percent earmarked for other Asian nations such as Japan, Korea, Singapore, and Malaysia.