Gaw Capital adds $200m to Gateway Fund IV

The Hong Kong-based private equity real estate firm has brought its capital total to $340 million for its fourth fund as it concludes investing for the predecessor.

Gaw Capital Partners has hauled another $200 million for its fourth China-focused private equity real estate fund as it finishes investing for its third fund.

It is understood the Hong Kong-based firm has raised another $200 million for its Gateway Real Estate IV fund, which it brought to the market early last year, according to PERE’s sources. The total now stands at about $340 million and the firm is expecting to hold a final closing at between $800 million and $1 billion, its hard cap, during the summer.

It is further understood that the investors committing capital to the second closing are new to the firm. For its first closing, which happened last October, commitments were made by repeat investors. Investors in Gaw Capital’s funds range widely, from family offices to sovereign wealth funds, and include other groups like endowments and pension funds too.

One factor thought to have smoothed the way for a second closing was early deals transacted by Gaw Capital for the fund which offered visibility to second closers. To date its resources have been invested into two transactions and two further transactions are close to being crystalized. These could account for approximately $200 million of the fund’s early equity catch although that figure could be diluted should certain investors evoke co-investment rights.

Gaw Capital, which was founded by Goodwin and Kenneth Gaw in 2005, has made efforts to adjust its investing strategy to mirror government policy. For the fourth fund, the firm is heavily concentrating its resources on affordable housing and retail in China’s tier II and tier III markets, areas where Beijing is keen see investment.

While the majority of its capital is likely to be deployed in mainland China, Gaw Capital will also be investing in Hong Kong and up to 20 percent of the fund can be invested in other countries in Asia also.

The closing comes as the investment activities of Gaw Capital’s third fund come to a close. Apart from some equity held in reserve, thought to be less than $10 million, the fund is understood to now be completely committed to investments. Gaw Capital attracted $423 million for the fund in 2009 at a dire time for capital raising for blind-pool, commingled real estate funds in general. That vehicle also had a target of more than $800 million. Now that capital markets are engaging with such vehicles more actively, there is thought to be optimism at the firm that its target will be reached this time around.

Gaw Capital declined to comment when approached.