PAG Raises Additional $270M for Third Pan-Asian Real Estate Fund

PAG has raised a further $270 million for its third pan-Asian core-plus/value-add real estate fund, according to a filing with the US Securities and Exchange Commission.

The Hong Kong-based private equity firm received its latest commitment to PAG Real Estate Partners III from three separate investors, as detailed in the Tuesday filing. The investors’ names were not disclosed.

The injection of fresh capital comes after the 2021-vintage PREP III secured $250 million from two large US pension funds last year.

The SEC disclosure preceded Thursday’s announcement that PAG and Singapore’s Mapletree Investments have agreed to form a joint venture to acquire Hong Kong’s Goldin Financial Global Centre from the property’s receivers for HK$5.6 billion ($713 million).

Pension Plan Favourite

PREP III is the most recent in the fund series after PREP II, which closed on $2.25 billion in 2019. PAG partner Broderick Storie leads the PREP strategy from Hong Kong, while the firm’s SCREP opportunistic strategy is piloted by Jon-Paul Toppino.

The California State Teachers Retirement System, which manages nearly $305 billion on behalf of the Golden State’s public educators, revealed last September that it had agreed to invest $200 million in PREP III.

CalSTRS’ disclosure came eight months after the firm led by Shan Weijian secured a $50 million commitment for PREP III from another US pension manager, the Employees Retirement System of Texas.

The early-2022 fundraising round coincided with at least one big-ticket real estate buy for PAG, as Mingtiandi reported in January that the private equity shop had agreed to acquire Cross Street Exchange near Singapore’s Raffles Place for S$810.8 million ($603 million).

Regional Property Focus

As of 30 June 2022, PAG managed $50 billion in assets for nearly 300 institutional fund investors from around the world.

PAG Real Assets, the real estate business of PAG, has more than $10 billion in equity under management across Asia Pacific after acquiring and managing over 7,000 properties in the past two decades.

The 50:50 JV of PAG and Mapletree will take charge of the Goldin Financial Global Centre after a series of failed tenders and cancelled sales over the past two years. The agreed price of HK$5.6 billion for the Kowloon East office tower values the asset at HK$6,316 ($809) per square foot of total lettable area.