Everbright Ashmore (EBA Investments), the Beijing-based real estate investment platform of the Chinese-owned state enterprise China Everbright Group, has raised RMB1.6 billion (€240 million; $220 million) for a blind-pool private equity real estate fund for investing in China.
PERE has learnt that the firm launched the RMB-denominated fund at the end of last year with a strategy of investing in value-add opportunities across different sectors in China. Part of the fund’s capital has already been deployed in residential and retail properties in Tier 1 cities. EBA Investments did not disclose further details about the deals.
The entire capital for Fund II is believed to have been raised from domestic high-net-worth investors in a single closing. Targeted IRRs for the fund that has a three-year term are between 12 percent to 15 percent.
This is the second RMB-denominated vehicle to have been launched by EBA Investments in the last two years. At the end of 2013, the firm raised RMB1.1 billion from domestic retail investors via a single close for Fund I, launched with the same investment strategy as Fund II. The entire capital has already been deployed across residential and commercial investments.
EBA Investments has raised a dollar-denominated fund in the past but PERE has learnt the firm made a conscious decision in 2014 to steer away from raising offshore capital and focus on domestic capital raising amid rising global investor’s concerns about the risk of investing in a slowing Chinese property market.
A decision was also made to suspend capital raising for the firm’s second dollar-denominated fund that was in the market at the time. According to PERE reports written at the time of the fund’s official launch in October 2013, the firm was targeting to raise $300 million for Everbright Ashmore China Real Estate Fund II that would be invested in residential and retail properties in tier II and tier III Chinese cities.
Meanwhile, the $153 million Everbright Ashmore China Real Estate Fund I, the firm’s maiden dollar-denominated vehicle launched in 2010, is currently in the exit phase. Of the six projects the fund’s capital was deployed in the firm has successful exited from two retail and three residential properties, generating average IRRs of 23 percent.
EBA Investments manages approximately RMB50 billion of capital through its opportunistic, value-added and debt strategy funds, as of June 2015.