Alpha Investment Partners Reaches $295M First Close on Latest Asia Fund

Just ten months after launching its latest value-add fund, Alpha Investment Partners has raised $295 million, including co-investment, for the Asia Pacific real estate vehicle, according to a statement this week.

The financing has allowed the private fund management division of Singapore’s Keppel Capital to call a first closing on Alpha Asia Macro Trends Fund IV, with a goal of reaching a target capitalisation of $1 billion in equity to be invested in opportunities arising in major cities around the region.

“In the current market conditions, we are monitoring developments for potential dislocations where stress is being observed, which create opportunities for investments with good growth potential,” Alvin Mah, CEO of Alpha Investment Partners said in a statement.

Alpha had first announced version four in the fund series in February of this year, and the Temasek Holdings-backed fund manager expects that, when fully leveraged and invested, Alpha Asia Macro Trends Fund IV will have assets under management of up to $2.5 billion.

Taking Aim at APAC Hubs

Now dubbed AAMTF IV, the new fund follows an approach similar to its predecessors in targetting multiple asset classes across APAC’s gateway cities. Alpha says that the fund will look at its home city of Singapore, as well as Greater China hubs such as Beijing, Shanghai and Hong Kong, while also venturing into Tokyo and Seoul. In Australia, the vehicle will include the cities of Sydney, Melbourne and Brisbane as within its scope.

The Asia Macro Trends series has been largely sector-agnostic in pursuing deals, with Alpha saying that this latest fund will pursue office, business park, logistics, retail and residential opportunities in in its search for returns.

While investing the $1.1 billion which it had raised for AAMTF III, the previous episode in its value-add series, Alpha had chosen assets from around the region, including teaming up with Allianz Real Estate one year ago to jointly invest €1 billion ($1.1 billion) to acquire an 85 percent stake in a Beijing commercial complex.

Alpha had also worked together with Allianz Real Estate in 2018 when the two investors teamed up to purchase a building in Shanghai’s Bay Valley business park for $90 million.

Notching Tokyo Returns

The fund manager has not yet disclosed the backers of its latest fund, however, it mentioned that the vehicle has received strong support from partners from insurers, endowments and pension fund managers.

This fourth installment in its APAC value-add series comes 13 years after Alpha kicked off the Asia Macro Trends effort in 2007. Since 2004, the fund manager has executed 180 transactions for its managed funds, with those deals worth more than $24 billion.

In addition to its office acquisitions in mainland China, in its AAMTF III effort, Alpha last year disposed of the Meguro Villa Garden office property in Tokyo, achieving an equity multiple of 2.5 times and an internal rate of return of about 70 percent on the investment, according to the company.

In December 2018 Alpha had already sold off Kanda 282, an 11,871 square metre (127,000 square foot) Tokyo office property which it also acquired under its AAMTF III fund. The company announced that it had achieved a 25 percent internal rate of return on its investment through the sale, after acquiring the Japanese asset 28 months earlier.

Note: This article has been updated to show that Alpha Investment Partners first launched AAMTF IV in October of 2019. An earlier version had indicated that the fund was launched in February of this year. Mingtiandi regrets the misunderstanding.