ASIA NEWS: New kid on the block

Private equity funds of funds firm LGT Capital Partners is planning to invest in Asia real estate funds. PERE Magazine, March 2010 issue.

It was as predictable as night follows day. When LGT Capital Partners head of private equity for Asia Pacific, Doug Coulter, told a GP-heavy audience at last month’s PERE Forum: Asia, that the business would begin to spend more time looking at Asia-focused real estate funds, he was swamped with enquiries.

Introducing himself before participating in the final panel discussion of the two-day event, Coulter said: “At the risk of being tackled after the conference and having my email box filled up – we will spend more time looking at the real estate space.”

Pfaeffikon, Switzerland-based LGT, which has $18 billion of private equity and hedge fund assets under management, has sampled real estate fund investments before, but according to Coulter, only in Europe. “Looking forward, Asia real estate is something we are very much focused on,” he said.

Coulter told the conference at the Four Seasons in Hong Kong that China would be one obvious starting point for the firm, despite delegate warnings about the increasing prominence of domestic capital in the country. “I don’t think the government there wants to shut foreign money out of the market,” Coulter explained. LGT has already invested approximately $500 million in China through its private equity business.

However, he also pointed to the less-peddled Indonesian market as a possible target. “We believe there the supply-demand imbalance of capital is quite interesting. The amount of institutional capital available in that market, given the size of its economy, is minimal.” Coulter said Indonesia’s GDP relative to neighbouring Vietnam – a market that has received a significant amount more institutional attention – was attractive and a further reason to invest in funds in the country. “Indonesia is a country on the right trajectory,” he said.