Forum Partners closes third Asia fund on $375m

The Greenwich, Connecticut-based private equity real estate firm is understood to have called time on its fundraising effort for its Asia Realty Income Fund III vehicle short of its original $1 billion target. Including last month’s investment in an Australian funds management business the fund has been invested into six transactions so far.

Forum Partners, the Greenwich, Connecticut-based private equity real estate firm, has collected $375 million for its third Asia opportunity fund, Asia Realty Income Fund III, PERE understands. The final closing was expected to have happened at the end of April.

The fund was brought to the market towards the end of 2009 originally with a capital raising target of $1 billion. However, the dire capital raising conditions of the time contributed to the firm ultimately bringing the curtain down on its fundraising efforts on less than half of its original target.

Nonetheless, it is understood that Forum managed to attract new investors to its third Asia fund in addition to repeat commitments from investors which had invested in its previous vehicles. Among those new to Forum were understood to include an Asian investor and a fund of funds.

The Asia Realty Income Fund III was devised to make investments in small to medium size property companies in need of recapitalisation or repositioning. In a marketing document viewed by PERE at the time of the fund’s launch, the firm detailed its investment thesis as making investments in “middle market property companies underserved by the investment banking communities”.

According to the document, Forum aimed to generate a net IRR of 18-20 percent over a holding period of four years from these investments.

Its investing activities in Asia are led by Forum’s regional head Merrit Maddux who is based in Hong Kong, although the firm also operates from offices in Beijing, Seoul and recently it established a presence in Sydney as part of an investment made on behalf of the fund.

Last month, Forum acquired a small Australian funds management platform from Australian boutique fund manager Viento Group for a nominal sum.  Adjacently, Forum also hired a team to run the platform from another boutique firm called The Denison Group.

Using capital from Asia Realty Income Fund III, Forum has agreed to inject approximately $20 million of mezzanine financing into Viento’s Diversified Property Fund, the management of which it has also inherited. The deal for the platform and fund, which controls about A$110 million (€86.9 million, $113.96 million) of secondary properties in Australia, was the fund’s sixth investment and brings its capital to beyond the 50 percent committed mark.

To read more about Forum’s investment in Australia, see this month’s PERE magazine.