Attractively priced secondary investments are getting harder to come by, said Jeremy Plummer, London-based chief executive of CBRE Global Multi Manager. That is why the UK firm is moving away from such assets to focus on joint ventures and co-investments with its third Asia-focused real estate fund, which closed last week at $236 million.

The firm had targeted $300 million.

CBRE GMM, part of property services group CBRE, is also seeking club deals and co-investments with the new strategy, which targets a net internal rate of return of 15% and started fundraising in July last year.

“The funds we were buying in the market two, three years ago originated from the 2006/2007 vintage," he told AsianInvestor yesterday during a trip to Hong Kong. "Roll forward a few years and most of those funds have already realised a lot of asset growth and are approaching full realisation."

Some 50% of Asia Alpha Plus III Fund’s capital has already been deployed, most of which by the end of last year. Investments include logistics assets in China and Japan, a distressed real estate strategy in Japan, and an office property strategy in Australia.

The investors are all European pension funds that had invested in the previous two Asia Alpha Plus funds: three from the UK, two from the Netherlands, one from Finland and one from Switzerland.

“AAP III will focus on investments which have a high proportion of pre-specified assets and those with a high proportion of the return coming from income,” said Adrian Baker, the fund’s manager.

The strategy's predecessor, AAP II, closed in November 2011 with $260 million. It invested in a mix of secondaries and JVs and has generated a net IRR of 21.1% per year on average between its inception and March this year.

Launched in 2009, the Asia Alpha Plus Fund closed at $269 million in July of 2010. Its average annual IRR was 13.3% as of March.

“The funds work well in a containable size. They can be deployed relatively quickly and that’s always been one of the priorities of the investors, rather than big funds that have a lot of money working for a long time,” said Plummer.

CBRE GMM managed assets of $13 billion as of June 30.