Phoenix Reaches $1.15B Final Close on Sixth Opportunistic Fund

Phoenix Property Investors has closed its latest opportunistic real estate fund at $1.15 billion, surpassing its hard cap by $250 million.

Phoenix Asia Real Estate Investment VI – the private equity company’s sixth pan-Asian investment vehicle – closed in September, according to placement agent Monument Group.

The announcement by Monument Group comes three months after Phoenix’ fund hit its initial target of $900 million in August with investors subsequently granting the fund manager a formal fundraising extension to allow time to lock in more capital.

Diversified across sectors including residential, office and retail, Fund VI is expected to invest mainly in Hong Kong, China, Japan and Taiwan.

Locking In Commitments from Institutional Partners

“There was substantial investor interest in Fund VI, owing to the team’s many years of experience as a value-oriented real estate investor,” said Monument Group’s managing director, Robert Mast.

The Boston-based placement agent said institutional limited partners make up the investor base for Fund VI including endowments, foundations, pension plans and sovereign wealth funds across Asia, North America, Europe and the Middle East

Phoenix Property Investors, which was founded by Benjamin Lee and Samuel Chu in 2002, sought the extension for the final closing of Fund VI after a number of limited partners requested more time to undertake internal due diligence and to sign off on commitments, according to sources cited by PERE in August.

The fund had reached a first close of $221 million in January last year after being launched at the end of 2017.

Having managed over $10.5 billion of gross real estate assets since the firm started seventeen years ago, Phoenix’s fifth opportunistic fund closed at its $750 million hard cap in December 2013, while Fund IV closed on $460 million in 2010.

$424M In Investments Allocated

“To date, we have committed to 17 investments from Fund VI, totalling approximately $424 million,” said Phoenix Property Investors’ Lee in a statement.

While details of these investments have not been disclosed, the firm’s most recently publicised deal was the acquisition of a set of three community malls in Hong Kong for HK$3.38 billion just over a year ago.

Located in Tseung Kwan O, the firm paid an average of HK$11,266 per square foot for the retail centres’ combined 300,000 square feet (27,871 square metres) of gross floor area.

Private Equity Funds Crowd in on Asia

Phoenix has achieved the close of its maiden $1 billion-plus investment vehicle amid a flurry of Asia-focused real estate fund raising over the past two months.

Just over two weeks ago, Kailong Real Estate Investment announced that it had surpassed the original target for its second US-dollar denominated, China-focused property fund by more than 30 percent, reaching a final close of $575 million.

That announcement came just a week after Hong Kong-headquartered alternative investment manager PAG was said to be aiming to raise $2 billion for its Secured Capital Real Estate Partners VII (SCREP VII) fund, less than two years after bringing in $1.9 billion for SCREP VI.

US private equity firm Angelo Gordon also joined the $1 billion-plus fund club two months ago after the New York-based firm reached a final closing of $1.3 billion for the fourth in the company’s series of Asia opportunistic funds.

UK-based investment firm Actis has also moved to renew its investment war chest after filing paperwork for its second Asia real estate fund – Actis Asia Real Estate 2 – with a target of $600 million, according to a report in PE News.