EXCLUSIVE: KaiLong hits $200m target for US dollar China fund

The Shanghai-based real estate investment firm has raised its targeted equity for its value-add real estate fund of which $60 million has already been invested in two deals in China.

The Shanghai-headquartered real estate investment firm, KaiLong Real Estate Investment, has reached its fundraising target of $200 million for its maiden US-dollar denominated real estate vehicle, PERE can reveal.

The final closing for the KaiLong Greater China Real Estate Fund is scheduled to officially happen in May 2015, by when the firm expects to exceed its original fundraising target by $50 million. A hard cap of $300 million has been set.

The capital has been raised from eight investors from around the global, which include fund of funds, European family offices and Asian family offices.

Launched in November 2013, KaiLong Greater China Real Estate Fund is a close-ended real estate fund, with a strategy to pursue value-add investments in commercial assets such as industrial parks, office and retail properties in China and Hong Kong. The firm is targeting an IRR of 18 percent from the fund.

Ivan Ho, the firm’s managing director in Hong Kong, told PERE that from the total capital raised, around $70 million in equity has already been invested in two real estate deals in Shanghai. The first was the purchase of a commercial office building in the Zhangjiang Hi-Tech Park, which is now part of the Shanghai Free Trade Zone. It has also acquired a non-operating hotel building in Shanghai called Project Laura, and has plans to convert it into an office building with some retail outlets.

The remaining capital is expected to be deployed before the end of 2015.

Launched in 2004, KaiLong has so far invested in 23 projects with a total investment of over RMB8.2 billion (€1.15 billion; $1.3 billion). Its current assets under management now total $500 million.

So far, it has raised four RMB real estate private equity funds, totaling RMB 1.5 billion in size.