Franklin Templeton launches second Asia FoF

Franklin Templeton Real Estate Advisors, the real estate investment arm of New York-based Franklin Templeton Investments, has launched its second Asia fund of funds after closing on its inaugural effort in November 2008.

New York-based Franklin Templeton Real Estate Advisors has hit the fundraising trail for the follow-up vehicle to its first Asia fund of funds, the Franklin Templeton Asian Real Estate Fund.

Announcing the fund launch today, the firm said it would invest in “selected private real estate funds across the Asia Pacific region”. It did not disclose how much it hoped to raise for the vehicle.

The firm’s fist Asia fund of funds closed on $383 million of equity, drawing commitments from investors in Europe and Australia. The fund of funds invested in 10 underlying funds across the region. That fund targeted an IRR of between 17 percent and 19 percent and an equity multiple of 1.8 times.

In its announcement, Franklin Templeton said Franklin Templeton Asian Real Estate Fund 2 aims to “offer attractive opportunities for diversification and the potential for attractive risk-adjusted returns”  by investing in managers able to “take advantage of inefficiencies and recent distress in their local property markets.”

Glenn Uren, managing director at the firm said: “Obviously markets have recovered. There will be challenges along the way, but macroeconomic data across the region, particularly in greater China, has shown significant concrete improvement.”

Uren also pointed out the region was becoming more attractive for the firm as there is “a new crop of local emerging managers” being launched which would provide it with what it described as “unique investment opportunities”.

The fund will not, however, invest in listed property securities or direct property, in keeping with the strategy of its predecessor.