Alpha Investment Partners, the real estate fund management platform of the Singapore-based Keppel Corporation, is on the cusp of fully investing the $1.65 billion Alpha Asia Macro Trends Fund (AAMTF) II.
PERE has learnt that the firm is doing the final paperwork for the last three deals via the fund and will be closing them by next month. These are office properties acquired in Tokyo, Seoul and Singapore.
AAMTF II is Alpha Investment Partner’s largest private equity real estate fund raised to date. The fund’s equity haul of $1.65 billion in 2013 represented at the time the largest capital corralled for a private real estate investment fund in Asia since the 2008 financial crises.
The three assets will undergo repositioning and asset enhancement in line with the fund’s value-add strategy. Christina Tan, managing director of Alpha Investment Partners, told PERE the office property in Seoul for instance – a Grade A office-cum-retail building – will have the retail space undergo repositioning to improve the tenant mix with expected uplifts in rents.
The most recent deal made via the fund was the S$1.1 billion (€700 million; $780 million) joint venture office investment platform established with City Developments Limited (CDL) in December last year. The platform acquired three office assets in Singapore. Including bonds, preference and ordinary shares, the total investment made via AAMTF II in the venture was S$200 million.
The fund, launched in 2011, is the second in the series of closed-ended, value-add vehicles typically invested in sectors that tap macroeconomic and social trends such as urbanisation and consumerism. Including leverage, the fund had a total investment capacity of $4 billion, according to earlier PERE reports. The targeted Asian cities for deployment were Singapore, Hong Kong, Taiwan, Korea, Japan, China and India.
Expected IRRs from the fund investments are in the mid-teens with a 1.8x equity multiple.
Meanwhile, AAMTF I, the firm’s maiden vehicle that attracted $1.18 billion in 2008 and was deployed into 21 investments in total, is currently in the exit phase and Alpha has returned around 80 percent of the capital to its investors.
Last week, the firm also announced that it will be launching the third fund in the series with an initial fundraising target of $1 billion within this quarter.