Hong Kong-based Gaw Capital has closed its fourth Asian property fund at $1 billion, with most of the capital aimed chiefly at opportunistic real estate deals in Greater China.
Gateway Real Estate Fund IV started raising capital early last year with a target of $800 million. At $1 billion – the fund’s hard cap – it is the property private equity firm’s largest vehicle, at nearly three times the size of Fund III, which closed in 2010 at $373.5 million.
The limited partner base for Fund IV is fairly evenly split geographically, with 40% of the investors sourced from Asia, 30% from North America and 30% from Europe. They include sovereign wealth funds, endowments and pension funds.
While Gaw did not disclose individual investors in Fund IV, publicly available statements indicate that allocations came from institutions that include New York State Teachers’ Retirement System ($75 million), Teachers Retirement System of the State of Illinois ($50 million) and San Francisco City and County Employees’ Retirement Systems ($50 million).
About 80% of the fund’s capital is earmarked for Greater China property, targeting major cities such as Beijing, Guangzhou, Hong Kong, Macau, Shanghai and Taipei. The remaining 20% will be aimed at Asian markets that include Japan, Korea, Malaysia and Singapore.
In mainland China, one focus will be on commercial properties in first- and second-tier cities, where the central government's efforts to cool the real estate market have resulted in attractive valuations, says Gaw. The firm oversees about $ 7.1 billion across property assets that span residential developments, retail centres, hotels and commercial properties.
Gateway Real Estate Fund IV is among the biggest Asia-focused property PE funds in the market this year. Blackstone Real Estate Partners Asia is set to be the largest, with a target of $4 billion, according to data provider Preqin.
Other sizeable Asian property funds in the process of raising money include Aetos Capital Asia V and Secured Capital Real Estate Partners V, each aiming for $1 billion; Invesco Asia Real Estate Partners III, seeking $800 million; and Carlyle Asia Real Estate Fund III, targeting $750 million.