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Aberdeen plots Asian core fund of funds

The European asset manager better known in Asian private equity real estate circles for its opportunistic fund of funds is to offer its first core multi-manager vehicle.

Aberdeen Asset Management, the European alternative investment firm, has set its sights on introducing a core strategy fund of funds for Asia, PERE can reveal.

The vehicle, which is anticipated to be launched later this quarter, is still on the drawing board in terms of how much capital Aberdeen will seek for it. But it is understood that investors that participate should expect a return of between 8 percent and 10 percent IRR after fees. 

It is also understood that at least one cornerstone investor has been lined up for a commitment to Aberdeen Asia Enhanced Core Property Fund of Funds.

If successfully launched, it is thought it would be the first of its kind for Asia, a region that is only just witnessing real estate investment managers introducing core real estate funds. A select handful of managers including M&G, Invesco, SEB Asset Management and SC Capital currently are, or have plans to, manage core real estate funds in Asia although that list is expected to grow meaningfully over the coming years.

The news of a core fund of funds comes as Aberdeen finally closes the latest of its main fund of funds series in Asia. Aberdeen has raised a total of $512 million in fund commitments and co-investment capital for its Aberdeen Asia III Property Fund of Funds, which it launched in 2012.

The original capital raising target was up to $400 million, 25 percent more than the $300 million it ultimately hauled aboard from investors. However, that shortfall was offset by an extra $212 million in co-investment capital raised in tandem with the fund.

All of Aberdeen’s investors are Europe-based institutions. Approximately 20 percent of the fund’s capital came from investors new to Aberdeen's Asia series.

Aberdeen’s third fund of funds will follow the strategy of its predecessors by which it will invest in all real estate strategies from core to opportunistic across the Asia-Pacific region.

The firm would not limit Fund III’s investments to commingled funds. Like an increasing number of its multi-manager peers, Aberdeen is also expecting to target club deals, joint ventures and co-investments with funds it has already made a commitment. Returns targeted for the fund are expected to be around 13 percent IRR.

At the time of closing, Aberdeen has completed two transactions and committed 20 percent of Fund III’s total capital.

Aberdeen manages more than $1.6 billion in property assets under management in Asia and $29 billion worldwide. It most recently closed on €151 million for its European secondaries fund and has already secured that fund’s first investments.