Since Q1 2013, a total of 53 private real estate vehicles managed by fund managers located in the Asia-Pacific region have held a final close; these 53 unlisted vehicles have attracted an aggregate $16.8bn from investors. Comparing quarters, Q4 2013 saw the highest amount of capital raised, with nine vehicles raising a total of $5.1bn. Fund managers had more success in 2013 than in 2014; total commitments of $11.9bn were garnered last year, while only $9.7bn was raised as of December 2014.
Singapore is home to 24% of Asia-Pacific-based fund managers that have closed a fund since the start of 2013. Australia-based real estate firms make up 21%, while India- and Japan-based firms each account for 17% of the pool. Interestingly, Singapore-based real estate firms are inclined to invest internationally, while fund managers that are based in Australia, India and Japan have a tendency to invest in their home countries.
A significant proportion of Asia-Pacific-based private real estate fund managers appear to have a high risk appetite, with 61% of unlisted vehicles that closed since 2013 employing an opportunistic or value added strategy. Opportunistic funds have attracted a significant $7bn in aggregate commitments, while value added vehicles have raised $6.2bn since the start of 2013. Real estate debt and core funds are the third most commonly used strategies among Asia-Pacific-based fund managers.
In terms of where committed capital will be deployed, it is not surprising that an overwhelming majority (96%) of unlisted vehicles raised by Asia-Pacific-based fund managers since 2013 will focus on investments in their home region. $13.8bn of capital will flow to the Asian real estate market, while at least $2bn will be targeting properties located in Australia. The remaining $1bn will focus on real estate in the US and the Americas.
The largest fund raised by an Asia-Pacific-based firm since the start of 2013 is Alpha Asia Macro Trends Fund II, which targets value added properties throughout Asia. The fund is managed by Singapore-based Alpha Investment Partners and has attracted $1.6bn in investor commitments.