Keppel Aims to Raise $1B for Alpha Asia Fund IV

Keppel Capital, the Temasek Holdings-backed asset management arm of Singapore’s Keppel Corporation, is targeting a $1 billion haul for its latest pan-Asian real estate fund.

While Keppel Capital has yet to formally file documentation with the US’ Securities and Exchange commission for what will be the fourth in its Alpha Asia Macro Trends series, the company’s private fund management arm Alpha Investment Partners is expected to begin hitting its milestones for the vehicle during 2020.

“We continue to see interest, both from existing and new investors, for our AAMTF series and are looking to launch the AAMTF IV and achieve first close this year,” a Keppel Capital spokesperson said.

The preparations for the latest fund, which were first reported by IPE Real Assets, come just over a year after Alpha Investment Partners announced the $1.1 billion final closing of its Alpha Asia Macro Trends Fund (AAMTF) III.

Warming Up for the Next Alpha Fund

Having fully committed the capital from AAMTF III, Keppel’s private fund management team is hard at work planning its follow up effort.

Although no commitments have been announced as yet, the AAMTF IV war chest will be deployed along the lines of its predecessor, targeting mega trends driving long-term growth in Asia Pacific including urbanisation, consumerism and intra-regional tourism.

In the most recent of its investments under AAMTF III, along with under funds managed by the private equity firm, Alpha announced that it had teamed up with Allianz Real Estate to jointly invest €1 billion ($1.1 billion) to acquire an 85 percent stake in a Beijing commercial complex from Warburg Pincus-backed developer D&J China.

For the fourth iteration in its regional strategy, Alpha says it will focus on key gateway cities in the region, including Singapore, Shanghai, Beijing, Tokyo, Sydney, Melbourne, Brisbane and Seoul, the fund will target multi-asset classes.

Six months before its Beijing deal with Allianz, AAMTF III had acquired a set of three Seoul office buildings for a combined KRW 430 billion from Korea’s Samsung SRA Asset Management.

Under the strategy Alpha says it will be searching for opportunities in retail and residential as well as pursuing acquisitions of offices, business parks and logistics.

Version three of the pan-Asian AAMTF showed a strong taste for Shanghai assets, including acquiring a pair of office projects in the city over the past two years.

During 2018 the Temasek Holdings-backed company partnered with Allianz and an unnamed co-investor to purchase Bay Valley C6, a Grade A office asset in Shanghai’s Bay Valley Business Park, from CITIC Capital at value of $90 million.

Then in March of 2019, the fund joined with stablemate Keppel Land in a deal to acquire the Yi Fang Tower office building in Shanghai for RMB 4.6 billion ($360 million).

Over the past three years the fund manager has also acquired real estate assets in Tokyo, Brisbane and other Asian hubs.

Strategy Attracts Pension Funds, Endowments

“With our experienced team, strong asset management capabilities on the ground and rigorous value creation initiatives, Alpha is well-positioned to seize investment opportunities to create value and drive returns for AAMTF’s investors,” a Keppel Capital spokesperson said.

Existing institutional investors in the fund series include pension funds, endowments and insurance companies, according to Keppel Capital.

In advance of launching AAMTF IV, Alpha has already announced one divestment from edition three of the strategy – the sale of an 11,871 square metre Tokyo office property, Kanda 282, which it disposed of for an undisclosed sum in December 2018.

Alpha said that it had achieved a 25 percent return on its investment through the sale after acquiring the Japanese asset 28 months earlier.