Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Sino Ocean operates in Beijing and is expanding in markets in the Bohai Economic Zone including Tianjin, Dalian, and Shenyang, and Zhongshan in the Pearl River Delta. Sino Ocean develops residential products for mid-market customers and office buildings for corporate clients.
In 2006 SCPEL made two investments in ChinaÆs real estate sector. In June, 2006 it made its first investment in the sector, investing $50 million in Shimao Property Holdings, alongside the real estate investment fund of Morgan Stanley. Shimao develops upscale multi-purpose properties including residential, hotel and commercial developments with a footprint - at the time - covering nine cities. Just a month later, in July, SCPEL invested $50 million in Greentown China Holdings, a developer in the Yangtze River Delta particularly Zhejiang, headquartered in Hangzhou.
The investment was led by Fan Chen, managing director and head of Greater China, SCPEL, who termed Sino Ocean one of the best companies in the industry: ôWe are impressed by Sino OceanÆs high quality management team and the robust management system.ö
Including the investment in Sino Ocean, SCPEL currently has around $135 million invested in ChinaÆs real-estate development sector. Chen added that the China practice would continue to focus on sectors highly correlated with the rising personal wealth and the improvement of living standards. SCPEL is the private equity arm of Standard Chartered Bank focused on companies in Greater China, India, Korea and Southeast Asia.
Real estate in the worldÆs two most populous countries, China and India, is flavour of the month for private equity investors. Rising disposable incomes and increased spending power are driving property prices in both markets to astronomical rates, driven by rapid development of residential, commercial and leisure properties.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains