AEP IM teams with Malaysia for $200m fund

The Singapore-based fund manager has joined forces with an investment arm of the Malaysian government to raise a Shariah-compliant global real estate fund.

AEP Investment Management, the boutique private equity real estate firm catering to Shariah-compliant investors, has teamed up with an investment arm of the Malaysian government to launch a RM620 million(€144 million; $200 million) global real estate fund, according to a government statement.

The vehicle, a private equity fund called Basil Property Trust, will be operated as a joint venture between AEP and Pelaburan Mara Berhad, the statutory agency of the government of Malaysia primarily responsible for private equity investments, fund management and other financial services. It is planning to seek commitments from five to ten Shariah-compliant investors, with a minimum subscription of $10 million.

Pelaburan Mara Group chief executive Nazim Rahman said the two managers hope to raise the full amount of the fund’s equity by the end of next year. AEP also told PERE that the firm is targeting a first close in January.

“This includes the joint sponsor capital of $50 million (RM155 million) that is committed on a 50:50 basis between AEP Investment and Pelaburan Mara,” Rahman said in the statement. The remainder of the fund’s Shariah-compliant investors will primarily be based in the Asia-Pacific or from Gulf Cooperation Council countries, including institutional, corporate and high-net-worth investors.

Basil Property Trust is expected to target business real estate assets regionally, but with a strong focus on Malaysia, Singapore, Australia as well as the United Kingdom. The real estate assets the fund will focus on are expected to include commercial office properties, business parks, and industrial or distribution premises.

Founded in 2008, AEP launched its first fund, Securus Data Property Fund, in cooperation with Singapore-based property conglomerate Keppel Data Centre Investment Management as the world's first Shariah-compliant data centre fund. The two firms completed the second round of fundraising for the fund in January this year, bringing the fund’s equity total to $275 million. Since then, the firm has added assets in Ireland and the Netherlands to the fund’s portfolio.