Hong Kong-based private equity real estate fund manager Gaw Capital Partners has raised another $50 million for its Gaw US Fund III commingled fund, according to a report in West Coast property news site The Registry citing a board meeting document from the Ohio Bureau of Workers Compensation Fund.
Following the Ohio Bureau of Workers Compensation Fund late December commitment of $50 million, the $400 million investment vehicle is making San Francisco and Seattle top acquisition targets, according to the media account.
Hong Kong-based Gaw launched its third US fund in November, and the commitment from the Ohio state government fund follows a parallel $50 million investment by the San Francisco Employees Retirement System, according to reports. The family run fund manager is now said to be aiming to raise a total of $400 million for the value-add fund.
Gaw US Fund III, which is also said to have received $180 million in commitments from Korean institutions, will be the fast-growing private equity real estate specialist’s largest US-focused vehicle to date. Gaw US Fund I reached a final close of $110 million in 2012 the firm headed by Goodwin Gaw raised $315 million for its second US fund, which closed in 2015.
New US Fund Targets Offices and Hotels in Western US
Gaw US Fund III is said to primarily target acquisitions in the western United States, including the cities of Los Angeles and Portland, in addition to Seattle and San Francisco. Gaw will also consider markets such as Denver and Nashville.
The Hong Kong fund manager previously announced that it had fully invested its US Fund II following the purchase of the Oakland Marriott City Center hotel in California in May. The 21-storey hotel with 500 guest rooms is located in downtown Oakland in the San Francisco Bay Area. The second fund also has acquired the Public Hotel in Chicago, the Hilton Del Mar near San Diego, and the Courtyard Oakland in the east Bay city’s downtown. After the acquisition of the Oakland Marriott, Gaw Capital also bought Manhattan’s Standard Hotel for $323 million in October last year.
Value-Add Fund Targets Up and Coming Communities
The US Fund III is said to be targetting acquisition and repositioning or redevelopment of “creative office” and “creative hospitality” assets in communities with young, well-educated demographics and which are experiencing strong employment growth. The real estate fund manager expects to take advantage of operating underperforming B-quality assets located in high-growth areas and convert them into A-quality assets in A-quality locations.
The three-year closed-end fund is aiming for a 12 percent net IRR, with a one-year extension option. The total life of the fund is for eight years with two one-year extension options.
Last April, Gaw Capital announced a final $1.3 billion closing for its Gateway Real Estate Fund V, which targets property assets in Greater China with selected exposure to Japan, South Korea, Australia and Southeast Asia.