Gaw Capital Partners has raised its biggest war chest ever as the Hong Kong-based fund manager continues to attract global investment for real estate opportunities in Asia Pacific.
The private equity firm run by Goodwin Gaw brought Gateway Real Estate Fund VI to its hard cap of $2.2 billion, according to a statement by Gaw Capital today – up from the $1.3 billion raised for Gateway Fund V when it closed in April 2017.
Gateway Fund VI, which Gaw says will follow an opportunistic strategy similar to its predecessor, has already begun deploying capital to acquire assets within the vehicle’s target markets, which focus on Greater China, along with more limited exposure to Japan, Vietnam, South Korea, Singapore, Southeast Asia and Australia.
Offering Investors Exposure to High Growth Markets
“The fund serves as an important investment vehicle for investors looking to get exposure to this high-growth region while achieving portfolio diversification,” Christina Gaw, Managing Principal and Head of Capital Markets for Gaw Capital said in a statement. “The commitments we have received are a strong vote of confidence in Gaw Capital’s approach to adding strategic value to a diverse range of under-utilized real estate assets throughout the Asia Pacific region and its ability to deliver value for investors.”
By late October of last year a report in PERE indicated that Gaw had already raised $1.3 billion for Gateway Fund VI, with the company then said to have already raised another $650 in co-investments through aligned vehicles. In its statement today, Gaw stated that it had raised up to $800 million in sidecar commitments alongside the new fund.
The company said that while continuing to target China’s first tier cities of Beijing, Shanghai, and Guangzhou, along with Hong Kong, Fund VI “will also consider operating thematic platforms and pre-IPO real estate companies looking for strategic capital in order to capture specific market trends and address particular needs.”
“In the spirit of the Gateway fund series, Fund VI will take an opportunistic yet prudent approach to its investments, identifying high-potential and attractively-valued properties in promising locations, and then managing them innovatively and creatively by introducing out-of-the-box concepts,” Kenneth Gaw, Managing Principal and President of Gaw Capital Partners said.
Texas, New York Institutions Back New Fund
Gaw’s latest vehicle attracted return investments by sovereign wealth funds, endowments, pension funds and other institutional investors who have backed the firm’s previous Gateway China Funds, along with new investors.
According to public records, US fund manager Texas Permanent School Fund is among the limited partners participating in Gateway Fund VI, with the Austin, Texas-based institution this year having committed $5 million to the pooled fund, along with another $25 million in sidecar commitments.
New York State Teachers Retirement System (NYSTRS) joined the latest Gaw fund last year with a $100 commitment, according to report in IPE.
Geographically, 46 percent of Fund VI’s investors are from Europe, 37 percent are based in Asia, and another 17 percent come from North America. Gaw Capital filed the original paperwork to launch the fund in late July 2018.
Gaw Putting Funds to Work in Greater China
Gaw indicated in the statement that capital from Fund VI has already been deployed to acquire residential buildings in Japan, data centre platforms in China, retirement villages in Australia, as well as assets in Singapore, Hong Kong and Shanghai.
Among the highest profile deals arising from the new fund was Gaw’s HK$12.01 billion ($1.54 billion) acquisition of a portfolio of 12 shopping centres from Hong Kong’s Link REIT in December last year through a consortium that also included Goldman Sachs and Blackstone.
The fund manager also dipped into its sixth US dollar opportunistic fund in January of this year when it acquired a set of four grade A office buildings in Shanghai’s Hongqiao area from China Resources Capital Management for a reported RMB 2.8 billion ($390 million).
During May this year Gaw put another HK$4.75 billion of the cash from Gateway Fund VI to work in Hong Kong during May this year when it acquired 625 King’s Road, an aging 26-storey office building in the city’s Quarry Bay area, from a joint venture led by Swire Properties.
Data Centres Move onto the Stage
Gaw has also committed some of the capital from Gateway Fund VI into data centres, following a trend toward fund managers pursuing opportunities in the fast growing niche.
Just last month the Hong Kong firm unveiled a joint venture with mainland data centre developer and operator Centrin Data to acquire, develop and operate hyperscale facilities in China. That joint venture is planned as the basis for a data centre-specific fund, joining a stable of more targetted strategies that Gaw operates alongside its larger APAC vehicles, including its Pan Asia Hospitality Fund as well as dedicated Vietnam and US funds.