Carlyle spin-out Ascent Real Estate has partnered with Hong Kong family office Chow Tai Fook Enterprises to launch a China real estate joint venture.
The new venture, called WS Ascent, is 75 percent owned by CTFE and 25 percent owned by Ascent employees. Led by Ascent’s founder Han Chen, the new entity will invest and incubate new real estate platforms across sectors that would be eligible for C-REIT exits in China, such as multifamily, dormitories and industrial assets. While both CTFE and the Ascent team are responsible for investment and asset management activities, the former will provide seed capital for future funds and platforms launched under the partnership.
Chen told PERE that Ascent and CTFE have been working together on deals over the past few years and the latter has been looking to institutionalize and build its own real estate fund management business. “Our team came as a good fit for that because we are still relatively small and we are very focused on China real estate, a market where CTFE sees long term potential,” he explained.
Led by real estate veteran and former Carlyle China executive Han Chen, Ascent Real Estate Investors comprises seven ex-Carlyle investment professionals. While the firm is still managing the remaining holdings in Carlyle’s China property portfolio, it also pursues deal-by-deal investments with co-investors as well as building sector-specific real estate platforms. Currently, the remaining legacy assets from Carlyle include a logistics portfolio of close to one million square meters in China and a stabilized office asset in Shanghai.
Shortly after spinning out from Carlyle in 2018, the firm teamed up with Zug-based Partners Group and other investors to acquire a Beijing mixed-use complex for $1.2 billion in 2019, PERE previously reported. At the same time, the management team from Ascent also acquired logistics platform Brilliant China and established life science platform Concora.
Through Brilliant China, Ascent has continued to manage the legacy logistics portfolio from Carlyle. Today, the platform has assets under management of $800 million. Meanwhile, Concora invests in China’s healthcare real estate sector and has purchased two projects in Shanghai with seed capital from CTFE totaling $110 million.
“CTFE has a long history in making real estate investments. With a deep pocket of cash reserves, they are also more flexible than institutional investors when making investment decisions and providing capital solutions,” said Chen.
CTFE is the family office of Hong Kong billionaire and property developer Cheng Yu-tung. Cheng was the founder of Hong Kong-listed property developer New World Development. Prior to the set-up of the joint venture with Ascent, CTFE had already invested in Concora and currently owns 75 percent of the life science platform.