Return to search

Allianz-backed KaiLong China fund raises $575m – Exclusive

Malaysia’s Employees Provident Fund and Townsend are among the investors in KaiLong’s second China real estate vehicle.

Shanghai-based real estate investment manager KaiLong Group has raised $575 million in the final close of its second Greater China-focused value-add real estate fund, according to the firm.

The final close for KaiLong Greater China Real Estate Fund II, which was completed in mid-October, exceeds the $500 million fundraising target set for the fund at the time of its launch.

PERE understands from one person involved in the fundraising that there are 16 LPs in the fund, of which 12 have committed more than $10 million.

Allianz Real Estate is the anchor investor in the US dollar-denominated fund, having committed more than 30 percent of the total capital. The German insurer’s commitment amounts to around $192.5 million, the person said. Malaysia’s Employees Provident Fund has also invested in the fund, though the investor’s commitment is not known.

However, multi-managers firms Partners Group and Franklin Templeton did not re-up into Fund II. These two firms were the anchor investors in the KaiLong Greater China Real Estate Fund I that closed on $238.5 million in 2015. Meanwhile Townsend Group, which also anchored Fund I, is also an investor in Fund II.

Around 30 percent of Fund II’s capital has been deployed so far across three deals – one apiece in Guangzhou, Shanghai and Hong Kong. The firm is targeting 18-20 percent returns from the investments made through the fund, in line with typical value-add returns.

Meanwhile, the 2015-vintage Fund I, which was fully invested in eight deals early last year, is in exit mode. The firm has sold five of the eight assets so far and has returned 120 percent of the fund’s capital to investors.

“We have been delivering our targeted returns since 2004 and expect to continue to achieve these returns by applying our value-add strategies, which [are] largely created by our vertically-integrated 65+ person team headquartered in Shanghai,” said Thaili Chi, KaiLong’s fund management managing director and partner.

KaiLong, founded in 2004, has offices in Shanghai, Beijing, Chengdu and Hong Kong.