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It is an eight-year, closed-end fund denominated in US dollars that targets returns of 25% net. There is no leverage planned at the project level.
The majority of the planned projects are urban developments. Just 10% of the portfolio will be allocated to seaside villa and resort-style developments. The principal project is a condominium block in Ho Chi Minh City, which will account for around 50% of the initial $200 million investment target. The full capital investment period is estimated at six to 12 months.
The Protego projects are aimed at wealthy locals. Urban developments are priced at approximately $5,000 plus per square metre for high-quality urban Ho Chi Minh flats and $1,500 to $6,000 for upscale villas.
ôResidential is the least volatile real estate segment in Vietnam and we can commence pre-sales after we build the foundations,ö says Charles Weeks, the head of new business development at Protego Real Estate Investors. ôOur investor profile is institutional real estate investors in the UK and Europe.ö
Management fees are 2% and the performance fee, after a 10% hurdle, is 20% up to a fund return of 20% and a 30% fee accruing on any higher returns. This includes a clawback provision. The fundÆs performance fees only accrue on cash realisations and not on surveyorÆs revaluations.
Protego's partners within the fund are Qudos Asia Limited, a Vietnam-based real estate developer, and its sister company, HBP Group, a local project and construction management firm.
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
Already on the rise pre-Covid, investments into data centre assets in Asia have accelerated in the past year, fuelled by interest from investors across the spectrum.
Actively managed funds were also not found to have better odds of higher returns than more passive funds.
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.