Gaw Capital Launches Latest Opportunistic Fund with $2B Target

Less than two years after closing on $3 billion in commitments for its Gateway Real Estate Fund VII opportunistic vehicle, Hong Kong’s Gaw Capital Partners has begun raising cash for its latest edition of the strategy.

The real estate private equity firm headed by Goodwin Gaw is aiming to raise $2 billion for Gateway Real Estate Fund VIII, according to market sources who spoke with Mingtiandi, confirming earlier reporting by Bloomberg. Gaw Capital representatives had yet to reply to inquiries from Mingtiandi by the time of publication.

The new fund targets investments in both equity and credit opportunities the sources said, with Gaw Capital having announced major investments in Japan and Australia in recent months.

The Hong Kong firm is launching the latest edition amid challenging times for real estate private equity firms, with fundraising in the industry having declined by more than half since its 2022 peak, according to a recently published survey.

New Frontiers

Gaw reached a final close on its Gateway Real Estate Fund VII in July 2023 with backing from sovereign wealth funds, endowments, pension funds and other institutional investors, according to an announcement at the time.

While the seventh fund was said to have a special focus on China, as well as other key markets around the region, Gaw Capital, like other major fund managers has found more appealing targets in other developed markets around the region as capital values for properties in Greater China have continued to slide over the past two years.

In February Gaw Capital said it had teamed up with Singapore-based Patience Capital Group to purchase the Tokyu Plaza Ginza shopping mall in Japan’s capital, with market sources pricing the transaction at $1 billion.

That retail acquisition came just over a half year after a fund managed by Gaw Capital acquired a third site for the firm’s western Tokyo data centre campus, potentially bringing the project to 78MW of capacity.

The company has also been active in Australia’s industrial and residential sectors, launching a senior-oriented housing joint venture with Greenfort Capital in mid-2024 before expanding that strategy to a pipeline of A$750 million (then $468.2 million) in homes through an additional acquisition in January this year.

On the shed side, Gaw Capital acquired a portfolio of Sydney industrial properties from Goodman Group for A$87 million in December, and the firm has also been active in lending Down Under, setting up an A$500 million ($325 million) partnership with Sydney’s Ray White Capital in August last year to invest in and manage private credit opportunities across Australia and New Zealand.

In its home market of Hong Kong, Gaw Capital has faced challenges from some existing investments, with the company having to extend a loan on a pair of office towers in the Quarry Bay area after its partner in the venture stopped servicing their portion of a loan on the properties in 2023.

In July last year a Gaw Capital joint venture with HSBC Asset Management cancelled a planned auction for an office property in Kowloon East as brokers struggled to drum up interest in the converted industrial asset.

Despite the Hong Kong challenges, Gaw Capital in February led a $260 million equity round of fundraising for HKEX-listed CSI Properties, with the company also having worked out credit deals with overstretched developers and investors in the city’s property market.

Fundraising Dips

A survey released last week by ANREV, INREV and NCREIF, a trio of organisations representing managers of private real estate funds, found that capital raised by its respondents totalled $123 billion in 2024, down 5 percent from a year earlier and having fallen by more than half from its high point in 2022.

“This year’s Capital Raising Survey reflects an overall capital raising environment that remains tepid,” ANREV chief executive Charles Haase said in a release. “Capital raising activity in 2024 declined further year-on-year and is down 53 percent from its 2022 peak.”

The survey noted that, despite slower fund raising, fund managers were more successful in deploying their newly raised cash in 2024, with 40 percent of capital raised having been invested, compared to 16 percent a year earlier.