EQT Exeter’s Fogle: Post-merger real estate business has two main strategies

The combined real estate business will run two fund series, one dedicated to logistics properties, the other on secular trends.

EQT Exeter, the real estate arm of Swedish private equity firm EQT, has now determined an integration plan following its merger with BPEA Real Estate last month, according to head of EQT Exeter’s Asia business Mark Fogle.

Following the merger, EQT Exeter’s Asia Pacific platform has been reorganized for two strategies, one called diversified, the other logistics. In essence, the former marks a continuation of BPEA Real Estate’s existing business which offered diversified commingled funds, Fogle told PERE. The latter is a specialized business, offering investors funds dedicated to the sector.

As head of the firm’s Asia real estate business, Fogle oversees both. He reports directly to Ward Fitzgerald, partner and head of EQT Exeter.

Former BPEA executives Paul Gately and Charles Lam have been appointed as the co-heads of EQT Exeter’s diversified business. Gately was a managing director, head of real estate investments for Australia and head of asset management in Asia at BPEA Real Estate. Before that, he spent nearly nine years at CLSA and was most recently the firm’s head of Australia prior to his departure in 2018. Lam has been a managing director at BPEA Real Estate for 11 years. Before that, he held senior roles at PGIM Real Estate and China Ping An Trust and Investment.

Meanwhile, Matthew Zann has been named head of APAC logistics at EQT Exeter. Zann was the former co-chief executive officer and managing director at Tokyo-headquartered logistics platform Bear Logi. EQT Exeter acquired Bear Logi in January 2022, inheriting a team of 25 staff in Japan and South Korea in the process. The Bear Logi team has been merged with EQT Exeter’s existing China logistics team to create the regional EQT Exeter logistics business.

‘Really strong focus’

Fogle told PERE that dividing EQT Exeter’s Asia Pacific business into two puts the firm in a position to have a “really strong focus” on two areas. “It is similar to what EQT Exeter does in North America and Europe where there are three series. They have logistics, residential and offices/life sciences,” said Fogle.

With a clear structure in place, EQT Exeter plans to raise a pan-Asia diversified fund and a pan-Asia logistics fund next year, according to Fogle. The pan-Asia diversified fund will essentially be the third fund in the BPEA Real Estate fund series, focused on opportunistic investments across different sectors. The logistics fund will inherit the flagship value-add strategy of Bear Logi.

“We haven’t set the final fundraising targets yet. Our goal will be to raise enough capital that we think we can deploy it prudently given deal sizes,” Fogle added. But he thought both funds would be similar in size and will be launched around the same time.

Current vehicles, the $1 billion BPEA Real Estate Fund II and the EQT Exeter China Logistics Fund are close to being fully deployed.

The integrated platform should also see EQT Exeter expanding into new sectors and geographies in the region given its increased capabilities. The merger doubled the firm’s headcount to approximately 70 people today. EQT Exeter currently has nine offices in the region. Fogle sees that number expanding to between 20 to 25 as the firm grows.

Going forward, EQT Exeter will invest in more cities in China and Australia. “We are in most of the major cities in China, including secondary and a couple of tertiary [cities]. If you look at Australia, we will probably expand into some additional cities there too,” he said. He also noted Japan and Australia will be two of the key markets for EQT Exeter.

In terms of sectors, he said the firm is targeting life science offices, self-storage facilities and build-to-rent residential properties across the Asia Pacific region – sectors benefiting from secular positive changes. EQT Exeter does not currently have exposure in these sectors, which should fit the diversified fund strategy.

“For now, if there is any change in the team, it is growth. If you look at what occurred after the firm’s merger in Europe, the growth in that region has been phenomenal. So, there should be a very similar footprint for its Asia business too,” said Fogle.