BPEA Real Estate, the real estate arm of Baring Private Equity Asia, the Hong Kong-based private equity firm of entrepreneur Jean Salata, has raised $1 billion for its second real estate fund, PERE can reveal.
In doing so, the firm has raised almost three times the equity it managed for its debut BPEA Real Estate Fund in 2015. That vehicle attracted $365 million of equity, although, with co-investment, its exploits ultimately accounted for closer to $700 million.
Co-investments will again be a feature of BPEA Real Estate Fund II, meaning the ultimate equity controlled by the firm for this round of real estate investments could exceed the $1 billion raised.
The closing already catapults BPEA Real Estate into a limited league of managers to have raised $1 billion for closed-end real estate vehicles in the East. According to PERE research, just 20 managers have raised that amount or more for only 32 funds since 2008.
The firm has also found itself among a small number of managers to have enjoyed a relatively rapid fundraising, taking just five months to raise BPEA Real Estate Fund II compared with a sector norm of more than one year.
The firm’s capital support has come following the strong performance of its 2015 debut fund, which, as of June, was fully invested and understood to be generating a net IRR of 21 percent against a target of 15-16 percent. These returns have come from four full exits which have generated $230 million proceeds.
As a result, a 30-strong, US pension heavy roster of institutions have invested in the second fund, including a number of repeat investors. Among them is Texas’s Employees Retirement System and County & District Retirement System. Among its new investors is the State of Maine Public Employees Retirement System. Endowments, foundations and insurance companies also committed capital to the second fund.
BPEA’s real estate team, led by veteran Mark Fogle, is expected to focus on 10 Asian markets: Hong Kong, Japan, Philippines, Korea, Australia, Singapore, India, Thailand, Malaysia and, notable for the firm, an increased focus on China, having made its first investment in China in the latter stages of Fund I.
Other notable investments from the first fund were made in the Philippines, including a $150 million investment in Global Gateway Logistics City, a 177-hectare mixed-use park near Clark International Airport close to Manila, in 2015. The investment, made as a loan, produced a 24 percent IRR.
It is thought the first deals for Fund II have been identified and are expected to close next month.
The final closing of BPEA Real Estate Fund II brings the total capital raised by BPEA this year to $5.5 billion, including a $4.5 billion first closing for the firm’s Private Equity Fund VII, exclusively announced by PERE’s sister publication PEI last month.
BPEA declined to comment.