Everbright Ashmore launches $300m second fund

Following the return of 50 percent of its first fund’s capital, the real estate joint venture has brought its second opportunistic fund to market.

Everbright Ashmore, the Beijing-based real estate investment platform of Chinese state-owned enterprise China Everbright Group, has brought its second US dollar denominated fund to market with a target of $300 million.

According to Eric Chen, the chief investment officer of Everbright Ashmore, Everbright Ashmore China Real Estate Fund II will maintain a strategy similar to that of its predecessor, targeting retail and residential investments across mainland China. The firm is particularly focused on the development of such assets.

Fund II’s residential developments will be focused on tier 2 and 3 cities, in partnership with local developers. Its retail investments will involve less development and more refurbishment, but will mostly be located in the suburbs of tier 1 and 2 cities, according to the Everbright Ashmore website.

The firm hopes to hold a first close on between $100 million and $150 million within the next few months.

Everbright Ashmore will be targeting institutional investors globally for the rest of the fund, but the firm did not give any particular geographic focus. Altlantic-Pacific Capital is serving as the placement agent for the fund.

The launch follows the second exit from Everbright Ashmore’s $153 million Fund I, from its December 2009 investment in IMIX Park in Chongqing to a strategic buyer. The size of the exit was not disclosed, but Everbright Ashmore was able to achieve a 27 percent IRR and an equity multiple of 2.1x, according to a firm statement. With this exit, Fund I has been able to return 50 percent of its invested capital to investors, Chen said.

“We continue to believe there are attractive opportunities in both retail and residential sectors and are excited to be launching our second fund,” James Pan, chief executive of Everbright Ashmore, said in the statement.

With approximately $1 billion funds under management across US dollars and RMB, Everbright Ashmore’s 25-strong team invests across opportunistic, value-added and debt platforms in China. Formerly known as Everbright ALAM, the firm was acquired by China Everbright and RQSI, a US management business, from failed Wall Street bank Lehman Brothers in October 2008.