October 30, 2013 –Hong Kong-based private equity real estate firm Gaw Capital Partners today announced the final close of its fourth China real estate fund, Gateway Real Estate Fund IV, bringing total equity raised for this fund to its hard cap size of US$ 1.025 billion – Gaw Capital Partners’ largest fund ever. Gateway Fund IV will employ an opportunistic investment strategy – targeting real estate assets that have favorable risk-return profiles in the Greater China and Asia Pacific region.
Goodwin Gaw, Chairman and Managing Principal, said, “The success of our fundraising efforts is a vote of great confidence in our successful track record of returns for our investors and in our unique investment strategy – opportunistic real estate investments in the Greater China and Asia Pacific.”
Gaw Capital Partners currently manages four real estate funds targeting the Greater China and Asia Pacific region and recently launched Gaw Capital Partners USA, which provides services for separate account direct investment and private equity real estate fund management in the US and UK markets. Gaw Capital Partners has raised equity in excess of US$3.387 billion since 2005 and currently commands assets of US$ 7.1 billion under management encompassing residential developments, retail centers, hotels and commercial properties.
Investors in Fund IV include sovereign wealth funds, endowments, pension funds and other top-tier institutional investors. The global institutional investors in Gateway Fund IV are truly a global mix: 40% of the investors come from Asia, 30% North America and 30% from Europe. The successful fundraising for Gateway Fund IV speaks to the slightly improved sentiment toward Asian real estate among global institutional investors. Global institutional investors favor investments that offer value and potential for capital growth as global economies continue to improve. Real estate assets maintain a special appeal – they are tangible and it’s an increasingly important asset class amongst global investors who are diversifying their investment portfolios.
“We are very pleased that many of our LPs from our previous funds again invested with us, showing their continuing support and trust,” said Christina Gaw, Managing Principal and Head of Capital Markets who spearheads the firm’s global fund raising efforts. “We also managed to attract new LPs from around the world and we look forward to building upon the success of our earlier real estate funds and providing exceptional returns to our global investors,” she said.
Geographically, Gateway Fund IV’s focus will be on gateway primary cities such as Beijing, Shanghai, Guangzhou, Hong Kong, Macau and Taipei, as well as secondary cities in the Greater China which Gaw Capital believes demonstrate strong economic fundamentals and long-term real estate demand, such as China’s Jiangsu Province.
The Fund will also focus on city-center retail assets with high pedestrian traffic as well as centrally located commercial assets in Tier I and Tier II cities in China where the government’s tightening policy has taken effect and created attractive pricing. Gateway Fund IV plans to invest at least 80% of its equity in the Greater China and 20% in Asia Pacific region such as Japan, Korea, Singapore, Malaysia and elsewhere.
Gateway Fund IV will employ an opportunistic strategy, targeting assets that have favorable risk-return profiles; these assets should display strong growth potential and value-added / repositioning opportunities.
The specific strategy for each target market will be developed based on local economic, demographic, and market conditions. Gaw Capital also believes that its in-house operating platforms will provide a significant competitive advantage over local market participants.
Gateway Fund IV intends to hold its investments for four to seven years. Gaw Capital will seek to add value during the holding period by improving occupancy, increasing rent, strengthening tenant mix, monitoring current market trends, and ultimately determining optimal exit time.