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Private Real Estate Funds in Market Targeting BRIC Countries – August 2013

by Karun Ahluwalia

  • 30 Aug 2013
  • RE

As Preqin’s Real Estate Online shows, there are 61 private equity real estate funds currently raising capital that focus on opportunities in the BRIC countries (Brazil, Russia, India, and China). This includes funds that consider this economic region as their sole focus, and ones that invest in countries that constitute this region as part of a wider geographic focus. Collectively, these funds are targeting just over $23bn in capital commitments, with an average target size of $406mn. Nineteen of these BRIC-focused funds are looking to secure more than this average.

Out of the 61 funds in market, interest in China is most apparent, with 27 vehicles targeting this country. These vehicles have an aggregate target of $15bn and an average target size of $608mn. Investor appetite in India is also of significant notice, with 24 vehicles that have a collective target of $8.8bn, and an average target size of $402mn. There are 10 funds in market targeting opportunities in Brazil which have an aggregate target of $3.5bn and mean target of $353mn. The four funds that consider Russia are much smaller, with a collective target of just over $1.4bn (€1.1bn), and an average target size of $350mn (€274mn). Investor appetite for these emerging market investments may be put down to a return in investor confidence as they look to take greater risk in the belief that markets will boom once again.

The capital targeted by the top five BRIC-focused funds in market equates to 33% of the €23bn total targeted by such funds. Interestingly, all of the top five funds are targeting opportunities in China, which highlights the resilient nature of investor appetite and confidence to commit the magnitude of capital within the region. The largest vehicle in market targeting opportunities in BRIC countries is Blackstone Real Estate Partners Asia. The fund is targeting $4bn while employing an opportunistic strategy and focusing on opportunities in China and India, as well as other regions in Asia. The second largest fund in market targeting BRIC markets is managed by Secured Capital Japan. Secured Capital Real Estate Partners V will operate a debt, distressed and opportunistic fund strategy while hoping to raise $1bn. The fund will look for opportunities throughout Asia, including China.

The number of final closes in the past 12 months including funds with a particular focus on the BRIC countries totals 20. These funds raised a combined total of $14bn with an average final size of $756mn. Brookfield Strategic Real Estate Partners was the largest fund to close in the last 12 months; the vehicle closed in July 2013, on $4.4bn, and seeks investments in commercial properties and real estate companies in Brazil as well as other regions.

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