BPE Asia, the Hong Kong-based private equity firm of entrepreneur Jean Salata, has raised more than half the equity it is targeting for its second private real estate fund in a single closing, PERE can reveal.
According to sources familiar with the fundraising, the firm’s real estate platform, BPE Asia Real Estate, raised $488 million for its BPE Asia Real Estate Fund II. The vehicle has a $750 million target and the remainder of the capital is expected to be raised in the first quarter of next year.
With its latest fundraising, the firm has placed itself in the top ten Asia-focused opportunistic private real estate investment management firms in terms of capital raising.
Indeed, according to PERE’s research, only PAG Real Estate, Gaw Capital Partners, CBRE Global Investors, EG Funds Management and BlackRock Real Estate have raised more at final closing in what has been a poor year for the capitalization of such strategies relative to prior years.
In the year, just 19 funds have held final closings totalling $8.9 billion versus 28 final closings totalling $15.24 billion last year. Next year’s number will likely be ahead, however, as sector powerhouse Blackstone is expected to close its second fund, BREP Asia II, which already has attracted $5 billion for its first closing, the same amount it raised for its entire first fund at the end of 2014.
BPE Asia Real Estate Fund I has been deployed so far into seven transactions in countries including the Philippines, Japan, Hong Kong and Korea.
The firm has already made four exits on behalf of the vehicle from which it is understood to have generated a net to investors return of 28 percent IRR and approximately 1.8x equity multiple. Among those exits was the sale of the AccraLaw office tower in the Philippines. The $75 million exit generated an IRR of more than 30 percent and close to a 2x equity multiple.
Including co-investment capital, BPE Asia Real Estate is expected to deploy somewhere between $700 million and $800 million of equity for Fund I.
It is this early performance which is thought to have enticed the fund’s investors to re-upping for Fund II although the second vehicle also has new investors. Those investing in the second vehicle are expected to be exposed to investments in the same markets as Fund I, although China is slated to feature as well as Australia this time around.
Salata set up BPE Asia Real Estate in 2011 with the hire of regional sector veteran Mark Fogle who today leads the platform. In an interview with PERE earlier this year, the private equity specialist said he was attracted to expanding into real estate by the distress in the asset class following the global financial crisis and the greater institutional appetite for it during subsequent recovery years.
BPE Asia Real Estate declined to comment.