(Hong Kong, August 24, 2010) – Hong
Kong-based private equity real estate firm Gaw Capital Partners has completed raising its third fund focusing on investments in Mainland China real estate, raising US$373.5 million earmarked for “unprecedented
opportunities” beyond the major cities of Beijing, Shanghai and Guangzhou.
‘Gateway China Real Estate Fund III’ will continue to
fast-growing mass market property sector in so-called second and third tier
cities – the country’s newer economic powerhouses, in addition to opportunities in the first tier
cities at the right price.
It targets both the residential sector, a focus of the firm since 2007 in response to the government’s urbanisation drive, while expanding into commercial sectors such as retail, offices
Gaw Capital’s latest
successful fund-raising makes it one of the leading
real estate private equity fund managers in the region.
The firm already has over US$1.1 billion in equity capital under management in two
other funds, launched in 2005 for Gateway China Fund I and 2007 for Gateway Capital Real Estate
Investors in the new Gateway Capital Real Estate Fund III include US endowments and pension
funds, sovereign wealth funds, multi-family offices and more European investors
than previously attracted – as well as existing investors in the two initial
investment vehicle targets returns of more than 20 per cent, conservatively
leveraged at a loan-to-value ratio of no higher than 50 per cent.
While the fund’s
primary focus is selected real estate in Greater China, where around
80 per cent will be invested, 20 per cent will be allocated for opportunities arising elsewhere in Asia, especially in Southeast Asia where
Gaw Capital’s executive team has a solid track record.
Capital Chairman Goodwin Gaw said: “With the continued support of our
investors, we believe we are well positioned to participate in the continued
growth and transformation of China’s
in the next 20 years, as China
continues to transform from an export led economy to a more balanced economy,
will offer unprecedented opportunities.”
His brother Kenneth Gaw, the firm’s co-founder and
President, said: “After almost five years and now with over US$1.5 billion in equity
capital under management, Gaw Capital Partners has now grown into one of the
leading real estate private equity fund managers in the region.
“Building on our ‘best in class’ acquisition and asset management teams,
I am confident that we will be able to continue to deliver strong returns to
“With this successful track record, the latest fund will continue to
expand our regional coverage as well as product type.”
Humbert Pang, Managing Principal and head of the
firm’s China operation,
said: “With the new fund we are continuing our strategy since 2007,
expanding more into China’s
second and third-tier cities.
“Taking advantage of urbanization programs and recent policy initiatives to stimulate domestic
demand and growth, we are embarking not only on residential projects in these
cities but also integrated projects with commercial, offices, retail and even
Christina Gaw, Managing Principal who
and capital markets division for Gaw CapitalPartners, involved
in fund raising and investor relations, noted that Gateway Capital Real Estate Fund III had been successfully completed despite a “tough fund raising environment in the past 18 months, with global
liquidity remaining relatively tight”.
She attributed the successful fund-raising exercise to Gaw Capital’s
“integrated company structure, strong track record and unique
positioning” in the Greater China region and selective Asian countries.
With its third fund, Gaw Capital Partners is
steering clear of real estate in China’s Tier 1 cities such as Beijing, Shanghai
and Guangzhou, with the exception of possible “distressed purchases” at
Gaw Capital is earmarking China’s
in emerging economic powerhouses such as Dalian,
Jiangsu Province and Chengdu where “government policies are much
more accommodating, even in today’s tightening environment”.