CLSA fundraising for third fund reaches $540m

Hong Kong-based private equity real estate firm CLSA Capital Partners has held a second closing for its third pan-Asia opportunity fund, just three months after holding its first, PERE can reveal.

The firm has now raised $540 million for its Fudo Capital III fund, an increase of $155 million on its first closing of $385 million in March. 

CLSA’s first closing happened in two months of fundraising, meaning it has taken just five months to raise well over half of the $850 million that the firm is targeting.

The hard cap for Fudo Capital III has been set at $1 billion and while the firm’s previous two funds both were oversubscribed, it is not thought it will extend that hard cap, even if there is demand from investors.

Those committing to CLSA’s first two closings are understood to be predominantly existing investors, although sources close to the matter believe that, at final closing the new/old investor split is likely to be more even. Placement agent Greenhill & Co is assisting the firm raise capital from new investors.

Investors to have already committed capital come from North America and Europe. However, it also is understood that the firm’s fundraising tour is yet to take in the Middle East and large parts of Asia. 

PERE reported previously that investors typically have committed to equity tickets of between $75 million and $25 million, although some co-investment is expected also to be offered, meaning investors could add to their capital investment.

Through the Fudo fund series to date, CLSA has remained largely faithful to an investment strategy focused on adding value to lower-grade office, retail and residential properties. It does not place much of an onus on development.

The firm is targeting typically opportunistic returns of approximately 20 percent IRR, however investors that have backed CLSA previously already have enjoyed higher returns. According to PERE sources, across Fudo Capital I and II, the firm has generated gross returns of 39 percent, well above most of its competitors. Fudo Capital I has been completely exited and Fudo Capital II was approximately 60 percent exited at the time of writing.

CLSA declined to comment when approached.