CITIC Capital, the China-focussed private equity and advisory firm, has raised $400 million (€297.7 million) of equity for its third real estate fund as it looks to capitalise on distressed property situations in the country.
The equity was raised from institutional investors from Europe, US, the Middle East and Japan, it said. It also includes an undisclosed amount of seed equity from CITIC.
Through its Capital China Real Estate Investment Fund III vehicle, CITIC Capital, part of Chinese financial conglomerate CITIC Group, will seek investments where it can add value to properties in distressed situations and investments in domestic developers which require equity injections. It will also invest directly in development.
Investments will focus on both China’s tier one and tier two cities. Targeted regions include the Pearl River Delta, Yangtze River Delta, Pan Bohai Gulf Region and major cities such as Chengdu, Wuhan and Chongqing.
CITIC Capital chief executive Yichen Zhang, said: “Supported by a track record of two previously launched real estate funds that focus on real estate investments in China, our third fund had obtained good response from global institutional investors despite a very difficult fund raising environment.”
CITIC’s previous funds include: the CITIC Capital China Property Fund, a “special situation opportunities” fund which was raised in 2005 and exited in 2007; and the CITIC Capital Vanke China Property Development Fund, a joint venture with Chinese developer Vanke Group. That fund was launched in 2006 and has invested in ten schemes across China by last summer.
Including real estate, CITIC currently manages more than $1.6 billion of capital from institutions globally. The capital is also spread across CITIC’s private equity, mezzanine and debt finance, asset management and special situations businesses.
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