Asia’s largest warehouse developer Global Logistic Properties, better known as GLP, has set up a RMB 10 billion ($1.6 billion) private equity fund in China to invest in logistics-related businesses, the company’s first fund targetting assets beyond real estate.
The vehicle, Hidden Hill Modern Logistics Private Equity Fund, will be managed by GLP’s private equity platform Hidden Hill Capital, according to a statement. The fund is backed by long-term institutional investors and insurance firms, including China Post Capital – an investment arm of the mainland state-owned postal operator, China Post Group.
GLP, which manages $50 billion of assets, completed a privatisation process in January by delisting from the Singapore exchange. The announcement of the new fund comes three months after GLP teamed up with state-owned insurer China Life to form a $1.6 billion value-add fund focussed on logistics opportunities in China.
GLP Expands Fund Platform Beyond Sheds
Singapore-based GLP describes the latest vehicle as “the only fund in China dedicated to investing in the logistics ecosystem.”
“The Fund will invest in adjacent growth sectors that complement GLP’s real estate business, with a focus on companies employing technology to enhance efficiency in the logistics industry,” commented Ming Mei, GLP’s co-founder and CEO in the statement. “We are excited to partner with like-minded investors, continuing our strategy of pioneering a smart logistics ecosystem that harnesses technology to enhance returns for our customers.”
Mei revealed to industry publication PERE that the Hidden Hill fund would be led by GLP executives Higashi Michihiro and Richard Dong. He said that although the vehicle would be focussed on China, he expects the strategy to expand to other regions as well.
GLP says it aims to expand its $50 billion asset management platform by setting up new funds and recycling more assets. The company is China’s leading shed provider with some 30 million square metres of modern warehouses completed or in development across 38 cities. Globally, GLP’s real estate fund portfolio spans 62 million square meters across eight countries.
New Fund Follows Lead Set By CEO’s PE Firm
Although the statement from GLP does not provide further details about the types of investments the new fund will target, the warehouse builder has a history of investing in projects previously backed by its CEO.
In January of this year it was revealed that Eastern Bell Venture Capital, a private investment firm where GLP CEO Ming Z Mei is a partner, had participated in a RMB 150 million ($23 million) investment in trucking tech firm Fuyoukache led by JD.com’s shipping affiliate, JD Logistics.
Then in March of this year, Mei’s Eastern Bell co-led, together with mainland utility State Power Investment Corporation, a $47.8 million investment in Shenzhen-based new energy vehicle firm Dishangtie.
In February of last year, GLP was reported to have joined with a private equity affiliate of China Development Bank to complete a $45 million investment in Beijing-based big data firm G7, which makes devices to provide real-time data on the activities of trucking fleets.
Eastern Bell Venture Capital had previously joined with China’s Tencent and Singapore’s Temasek Holdings in a $45 million series C financing round in G7. GLP and Eastern Bell have also invested in B2B logistics platform KXTX.
“We started investing GLP’s balance sheet capital in adjacent emerging technologies – robotics, AI – and, over time, we had institutional investors coming to ask us first for advice, then if they could invest alongside us. We thought it was maybe time to institutionalize it,” Mei noted to PERE in reference to the newly announced fund.
GLP Ventures into Solar Energy
In addition to its direct investments in logistics technology, GLP has recently ventured into infrastructure, teaming up with Canada’s Brookfield Asset Management in March to develop 300 megawatts of commercial and industrial rooftop solar power systems in China over the next three years.
GLP has also built up its platform by investing in a series of logistics-focused funds. This past February the company unveiled the $1.6 billion GLP China Value-Add Venture I, in which mainland insurance giant China Life is the sole investor.
GLP had previously closed China Logistics Fund II (CLF II) after securing $3.7 billion of equity commitments from global institutions in May 2015. The fund, which targets an investment capacity of $7 billion, follows CLF I which was set up in November 2013, targetting $3 billion of assets under management.