29 August 2018
BPEA Real Estate Raises US$1 Billion for Second Asian Real Estate Fund
Fund was oversubscribed and almost three times larger than first fund
Hong Kong – BPEA Real Estate today confirmed the final closing of its second dedicated real estate fund, BPEA Real Estate Fund II (“Fund II” or the “Fund”), with total capital commitments of US$1 billion. The fund was oversubscribed and closed at its hard cap.
Fund II had an initial target of US$750 million. It achieved a first close in December 2017 and was oversubscribed five months later by May 2018. Following an allocation process, the Fund closed at $1 billion in July 2018. Fund II received strong support from the existing investors in BPEA Real Estate Fund I (“Fund I”) who re-upped for 140% of the size of Fund I. In reaching the hard cap, Fund II doubled its investor base as compared to Fund I and attracted several new internationally recognized investors. The investors in Fund II are well-diversified from around the globe with the bulk of the capital raised from pension funds, endowments, foundations and insurance companies.
Fund II succeeds Fund I which is fully invested across nine transactions and was delivering a net IRR of 21% as of June 30, 2018. Four of these investments have been fully exited to date.
Fund II is a pan-Asia Pacific real estate fund that will seek to generate opportunistic returns by investing in a diversified portfolio of value-add and opportunistic assets. BPEA Real Estate has a dedicated team lead by a senior group of investment professionals who have been investing in Asian real estate for an average of 22 years, and together at the firm since around 2012.
Fund II will focus on creating value in real estate projects across Asia Pacific including Greater China, Japan, South Korea, Australia, Singapore, Southeast Asia (the Philippines, Thailand and Malaysia) and India. The Fund seeks to drive value from active asset management and has flexibility to act as lender to real estate projects, as well as invest equity either as 100% owner or in partnership with joint venture partners. Fund II has already made its first commitment, an investment in a logistics operating platform in China with an expected ultimate transaction size of approximately US$300 million.
Mark Fogle, Head of Real Estate at BPEA Real Estate, commented: “We are extremely grateful for the vote of confidence from both our existing investors and the new Fund II investors who have entrusted us with their capital. We have conviction that our multi-market approach and focus on capital preservation is especially relevant in today’s market, and believe that growth of the region generally as well as the need for better quality real estate assets across much of the region provides a great investment opportunity for many years to come.”
Jean Eric Salata, CEO and Founding Partner, commented: “We established our real estate platform as a way for the firm’s private equity investors to access the attractive risk-adjusted returns in Asian real estate markets, and I’m pleased that our strategy of broadening the firm’s product offerings has been so well received. Around 60% of the investors in Fund II are also investors in our private equity funds and we see this support as strong validation of our position. As one of the largest alternative investment managers in Asia we are fully dedicated to the region, and believe that the performance of Fund I proves that our strategy can offer a better risk-return profile than real estate funds in developed markets.”
BPEA Real Estate started in 2011 as a part of Baring Private Equity Asia (“BPEA”), which is one of the most stable and established private investment firms in Asia with a track record over 20 years and over US$16 billion in capital commitments. BPEA operates from eight Asian offices located in Hong Kong, Singapore, Tokyo, Shanghai, Beijing, Jakarta, Mumbai and Delhi.
For further details please contact:
+852 3758 2686
About BPEA Real Estate
BPEA Real Estate is a part of Baring Private Equity Asia (BPEA), one of the largest and most established private alternative investment firms in Asia, with total committed capital of over US$16 billion. BPEA runs a pan-Asian investment program, sponsoring buyouts and providing growth capital to companies for expansion or acquisitions, as well as a private credit and a pan-Asian real estate private equity investment program. The firm has been investing in Asia since its formation in 1997 and has over 160 employees located across offices in Hong Kong, China, India, Indonesia, Japan and Singapore. BPEA currently has over 30 portfolio companies active across Asia with a total of 158,000 employees and sales of approximately USD31 billion in 2017.
For more information, please visit www.bpeasia.com/real-estate/