EXCLUSIVE: Gaw Capital raises $300m logistics fund

For its first sector-specific fund, the Hong Kong-based private equity real estate firm raised more than two-thirds of the capital from its main Gateway fund series investors and one-third from its latest fund.

Hong Kong-based private equity real estate firm Gaw Capital Partners has expanded its repertoire of investment vehicles with the closing of its first sector-specific commingled real estate fund.

PERE can reveal that the firm has raised $300 million from its investors to acquire a number of assets in the development pipeline of a Shanghai-based logistics firm called Vailong.

It is understood that $220 million of the equity committed to the fund came from investors that have backed Gaw Capital’s main series of opportunity funds, the Gateway Real Estate Funds.

The remaining $80 million of the capital has come from the latest of the Gateway funds, Fund IV, which attracted more than $1 billion from investors at the end of 2013.

The capital will be deployed through a joint venture company formed by Gaw Capital and Vailong which is thought to have a pipeline of about 20 investments and Gaw Capital is expected to capitalize about half of these.

The fund, raised for these investments, is scheduled to run for between five and six years during which time, Gaw Capital is expecting to generate opportunistic IRRs of 19 percent to 20 percent and an equity multiple of 2x.

The investment means Gateway Real Estate Fund IV is almost 70 percent invested, bringing it closer to the prerequisite hurdle that Gaw Capital must pass before fundraising once again.

Indeed, PERE also understands that hurdle could be passed as soon as Q4 this year after which the firm will hit the fundraising trail again.

While documentation is yet to be formed for the next vehicle, there is an early understanding that Gaw Capital could target as much as $1.5 billion, which would make it the largest pool of capital ever raised for Chinese real estate.

Gaw Capital declined to comment.