Singapore-based SC Capital Partners has reached a final close of $850 million on its latest Asia Pacific real estate fund, according to an announcement by the private equity manager earlier this week.
The total capital raised for the firm’s fifth discretionary private equity fund, known as RECAP V, comprises $650 million of equity commitments to the pooled vehicle, along with another $200 million for co-investment from existing fund participants.
Launched in August 2017, the fund reached a first closing of $383 million in December 2017. With a $1 billion hard cap set when the initiative was launched, the total raised capital fell short of the manager’s target by $150 million, according to people familiar with the matter.
US Public Pensions Among Investors
The opportunistic fund, which is the fifth in the series for Thai-Chinese financier Suchad Chiaranussati’s firm, has received backing from institutional players from North America, Europe and Asia Pacific, with the goal of deploying that financing to acquire undervalued real estate assets in Asia Pacific.
Eighty-two percent of the fund consists of investments made by existing investors, including public and private pensions, university endowments, private foundations, family offices, insurance companies and funds of funds.
The US pension funds Fort Worth Employees’ Retirement Fund, SFERS, and COPERS count among the participants, while an unnameed US endowment fund and a Thai-based institutional investor are joining as new investors, according to people familiar with the matter.
“We remain steadfastly determined to continue delivering attractive risk-adjusted returns through our entrepreneurial and deep-value approach to deploying capital,” said Chiaranussati.
$280M Already Deployed
RECAP V has already completed ten investments to date across Australia, Japan, China and Southeast Asia. These include logistic warehouses in China, independent senior living housing in Brisbane, and office assets in Canberra and central Tokyo.
“I am pleased that our team has already deployed more than $280 million of RECAP V equity into high quality investments across the region,” said Chiaranussati.
SC Capital Partners’ chairman added that elevated valuations in most markets in the Asia Pacific region have prompted the fund to exercise caution by maintaining low leverage and disciplined underwriting in defensive asset classes.
“We foresee some market volatility in the coming years and RECAP V is structured appropriately to capture this market opportunity,” he said.
The final closing of the fund on May 21st follows its $45 million acquisition of a civic office complex in the Australian capital earlier in the month, and a S$230 million ($169.53 million) deal to buy a shopping centre in northeastern Singapore from a fund managed by AEW in March.
$145M Value-add Office Asset in Central Tokyo
The fund made another, previously unreported acquisition two months ago when it acquired a commercial building in Tokyo for a purchase price of roughly $145 million, including $52 million of fund equity, according to information obtained by Mingtiandi.
The grade A building, with 16 floors of office space and one ground-level floor of retail, has a gross floor area of 38,984 square metres (419,620 square feet), valuing the purchase at $3,719 per square metre.
The Singapore-based private equity manager expects the building, located adjacent to the Tsukiji Fish Market, to benefit from the large-scale redevelopment of the area around the sushi hub and the nearby construction of the Olympic Village for the 2020 Olympics.
The RECAP V fund purchased the 17 storey tower at a discount to market and plans to invest in reposition and re-leasing the property, in keeping with the fund series’ investment strategy of targeting undervalued, under-managed and distressed assets.