Gaw Capital Partners has raised $1.2 billion in equity for the seventh edition of its opportunistic real estate strategy targeting the Asia Pacific region, as the Hong Kong-based fund manager marks a first closing on its way to a $2.5 billion target for the closed-ended fund.
Poised to become Gaw Capital’s biggest fund to date, the firm led by founder Goodwin Gaw and his siblings, said in a release that Gateway Real Estate Fund VII will focus on deploying capital into new economy and thematic properties across the region, with a special focus on China as well as other key markets including Japan, Vietnam, South Korea, Singapore, Southeast Asia and Australia.
“The commitments we have received reflect a strong vote of confidence in Gaw Capital’s approach to investing in a diverse range of asset-backed platforms throughout the Asia Pacific region and its ability to deliver value for investors,” Christina Gaw, managing principal and global capital market head of Gaw Capital said in the statement.
The fund raising, which Gaw says received backing from sovereign wealth funds, endowments, pension funds and several “top-tier” institutional investors, comes less than two years after the Hong Kong fund manager reached a final $2.2 billion closing on its Gateway Real Estate Fund VI in December 2019.
Targeting High-Yield Sectors
Gaw Capital, which has $32.5 billion in assets under management, said the seventh version of its APAC real estate fund series will remain opportunistic in nature similar to its predecessor vehicles and will focus on new economy real estate assets with “favorable risk-return profiles” such as life science and medical asset-backed platforms, data centres, warehouses, niche retail, outlet malls and education-related properties.
“Our increased expansion into thematic platforms such as data centers, healthcare and education-related real estate platforms are welcomed by our investors. Our APAC flagship fund series serves as an important investment vehicle for investors looking to gain exposure to this high-growth region with a well-balanced portfolio diversification,” Gaw said.
In addition to the $1.2 billion in commitments garnered by the pooled vehicle, Gaw said that it has secured $400 million in fresh capital for sidecar co-investment.
With the announcement of the first closing coming just two months after Gaw formally registered the fund with the US Securities and Exchange Commission, the firm said that it had received backing from investors in previous funds, as well as new partners, without naming the fund’s limited partners.
Gaw’s Gateway Real Estate Fund VI received backing from US fund manager Texas Permanent School Fund and the New York State Teachers Retirement System, in addition to other investors.
Building up Funds
While the company failed to provide the details of the fund’s seed assets, a report by Bloomberg Law in late October indicated that Gaw is in late-stage discussions on the potential acquisition of Singapore’s 20 Anson Road office building from AEW Global Advisors for S$588 million ($433 million).
Also this year the fund manager began expanding its data centre strategy beyond mainland China into Southeast Asia with the launch of Data Centre First, a Singapore-based joint venture which has already taken on a project in Batam, Indonesia.
The company has also showed signs of building up a team to start deploying some of its new cash, including having recently appointed data centre expert Mark Messana as its digital infrastructure advisor and hiring Yew Hock Tan, who previously served as the director of fund manager SC Capital Partners, as a senior director based in Singapore.
The cash raised for Gateway Real Estate Fund VII will add the $10 billion in overall equity commitments made to previous editions of the strategy, which the firm has already deployed into some 71 investments.
Some of these funds’ key investments include a joint venture with mainland developer China SCE to develop rental apartment projects across key mainland China cities in 2018 and the firm’s 2019 acquisition of the Robinson 77 office building in Singapore’s Tanjong Pagar area.
Being one of the biggest real estate private equity firms focused in Asia, the 15-year old investment firm also handles a Vietnam-specific fund, a pan-Asian hospitality venture and a European hospitality vehicle, alongside the Gateway series.
In May this year Gaw also reached a $430 million final closing on its proptech-focused Gaw Growth Equity Fund I.
Gaw’s first closing for Gateway Fund VII is set to add to capital flows into Asia Pacific real estate which are rapidly becoming a torrent as global institutions back strategies targeting returns from offices, warehouses, data centres and other top sectors in the region.
Just last week, UK-based fund manager Actis announced that it had raised $251 million for its second Asia fund, with capitalisation of that vehicle still ongoing.
Two of the world’s largest real estate fund managers are also raising cash for APAC initiatives, with Chicago-based LaSalle recently securing an initial $1.07 billion for its LaSalle Asia Opportunity VI vehicle and private equity titan Blackstone notching $4 billion of its $9 billion target for Real Estate Partners Asia III fund, with both of those milestones announced last month.