Gaw Capital Launches $1.5B Asian Real Estate Fund

Gaw Capital Partners has started raising $1.5 billion for its fifth Asian real estate investment fund, as the family run Hong Kong private equity firm seeks to climb the ranks of real estate fund managers globally.

Gaw’s Gateway Fund V would seek to invest across Asia, but with a target of around $750 million for deals in mainland China, according to an account in industry publication PERE.

This latest fund comes after Gaw raised $1 billion for its Gateway Fund IV, which closed in 2013, with the majority of that fund tabbed for the mainland market. Since the earlier fund was raised, Gaw has spread its activities regionally to Japan, South Korea and Vietnam, as well as becoming a leading advisor and investor for Asian capital making acquisitions in more developed markets.

Targetting Opportunities Across Asia

The Hong Kong private equity real estate fund began discussions with investors for this latest fund two weeks ago, according to the PERE account, now that the capital raised in Gateway Fund IV is said to have been 85 percent deployed. Gaw, which has been building up its asset management team in the region, typically looks for value-add opportunities where it can buy aging or close-to-core assets, and then renovate or reposition them for enhanced returns.

Among the major acquisitions made by Gaw during the term of its fourth fund were the $928 million acquisition of the Pacific Century Place commercial complex in Beijing, which it acquired in April of this year, as well as the $938 million purchase of the Hong Kong Intercontinental Hotel in July of this year. For the Intercontinental deal, Gaw is understood to have teamed with Korean sovereign wealth fund KIC.

Also this year Gaw teamed with European warehouse developer Vailog to invest in opportunities in China’s logistics market, and picked up a portfolio of real estate assets in Vietnam from Indochina Capital’s failed property fund Indochina Land Holdings II for $106 million, after investors had put $265 million into that vehicle.

Going Pan-Asia as Enthusiasm Dims for Mainland Deals

Gaw’s decision to move beyond its traditional base in Hong Kong and mainland China to look for opportunities may reflect the challenges that fund managers are currently facing raising funds for acquisitions in China after a flurry of sour economic news from the mainland.

In 2014 Gaw invested a reported $200 million to acquire an office tower in Seoul, South Korea, and that same year purchased the Hyatt Regency in Osaka for a reported $30 million.

The company, which is run by siblings Goodwin, Kenneth and Christina Gaw have also figured prominently in a number of acquisition by mainland and Korean institutional investors into the US and the UK, after advising China’s Ping An Insurance on the acquisition of the Lloyd’s of London building and Tower Place in the UK.

Gaw also led the $725 million purchase of a Seattle office tower in June of this year.