Following up on a string of data centre and logistics deals, fund manager Actis has reached a $700 million final closing for its second Asia real estate fund, which targets new economy assets across emerging markets across the region.
The London-based private equity firm was able to reach a little over 93 percent of its $750-million target nearly three years after launching Actis Asia Real Estate Fund 2 in 2019. According to a press statement late Wednesday, it is expecting additional co-investments that could expand the vehicle’s total equity to $1 billion.
“Through our deep understanding of micro-market dynamics our focus is on delivering institutional quality cash flow by matching demand- driven by new economy sectors- for logistics, industrial, specialized office and urban repositioning,” said Brian Chinappi, partner and head of Actis’ real estate business. “We believe values drive value – by instilling sustainability leadership in our investment approach we ensure our assets are leading-edge and future proofed.”
With a focus on real estate assets across China, South Korea, India and Vietnam which benefit from growth in tech-powered industries, Chinappi told Mingtiandi that his team has already acquired two data centres in Korea, a pipeline of logistics projects in China and an industrial development in northern Vietnam on behalf of the strategy.
Around $350 million of the capital raised for Actis Asia Real Estate Fund 2 has already been deployed into projects spanning the industrial, specialised office and data centre sectors.
In 2020, Actis acquired its first data centre development project in Korea through a $315 million joint venture with construction firm GS E&C. That 26 megawatt Greater Seoul project was followed by the acquisition of a data centre site in the heart of Seoul for a facility that is expected to commence operations by the second quarter of next year providing a total of 50 megawatts of capacity across the two locations.
On the logistics side, the firm set up a $200 million China joint venture with Warburg Pincus-backed New Ease (now part of DNE Group) in 2020, to develop three logistics projects in the mainland China cities of Chongqing, Tianjin and Quanzhou, in Fujian province.
In Vietnam, the fund manager partnered with local green plastic producer An Phat Holdings in June of last year for a $250 million industrial park project. The partners are developing a 180 hectare (445 acre) industrial park inside the country’s Northern Key Economic Zone to provide ready-built workshops and warehouses for lease as Vietnam becomes a manufacturing destination of choice.
“This fundraise, undertaken during challenging times, is a strong validation for our real estate business, allowing us to continue to develop and operate sustainable assets in the world’s most dynamic cities,” said Neil Brown, partner and head of investor development group at Actis. “We look forward to continuing to invest in real estate that enables the new economy while creating a positive impact in the countries, cities, and communities in which we invest.”
Chinappi expressed satisfaction with the volume of capital raised through backing from both existing and new investors, with an SEC filing in November last year having reported that the strategy had raised $251 million in commitments just five months ago.
American real estate advisory firm Hodes Weill advised Actis on the funding exercise.
The fund’s final closing comes as Actis expands its Asia Pacific team through a series of promotions and new hires, including the opening of its Japan office last week, headed by former Macquarie Capital executive Jun Ohashi.
The fund manager said it plans to invest nearly $500 million in Japan over the next four to five years, with energy transition assets and new economy real estate as key targets.
In the same announcement Actis said it had hired former Macquarie Capital executive Tareq Sirhan to lead its energy business in Japan, South Korea and Taiwan, and promoted six partners to senior roles.
The UK-based fund manager has raised $24 billion since its inception, with public pension funds, development financial institutions, private pension plans and sovereign wealth funds as its biggest investors.