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Gaw Capital captures early equity for Gateway IV

The Hong Kong-based private equity real estate firm garners $140 million in a pre-first closing to acquire a small number of seed assets.

Gaw Capital Partners has held an early closing for its fourth China real estate opportunity fund at $140 million, PERE has learned. The Hong Kong-based firm is ultimately targeting between $700 million and $900 million for its Gateway Real Estate IV fund.

The firm, founded by the Gaw family, is expecting to hold an official first closing at the turn of the year but is thought to have required the early capital to pay for a small number of seed assets. The capital has come from repeat investors from its previous funds. Gaw Capital’s investor pool runs the spectrum from family offices to sovereign wealth funds and includes groups like endowments and pension funds also from around the world.

While the firm is aiming for up to $900 million for the fund, it is understood to be paving the way for more co-investment, sidecar vehicles for certain of its investors and that could see its fundraising effort pushed beyond the $1 billion mark. Historically the firm has facilitated few co-investments but, in line with the expectations and ambitions of some large institutional investors currently, Gaw Capital is expected to offer more to sit alongside Gateway IV

The investment remit for Gateway IV is expected to represent something of a continuation of the strategy for the firm’s previous three funds, which collected approximately $1.4 billion between them. Since forming in 2005, the firm has invested heavily across China, particularly in the residential sector and across Shanghai, Chengdu, Guangzhou as well as Hong Kong.

For Fund IV, which is expected to run for eight years with two options for one year extensions, Gaw Capital is expected to target affordable housing and retail investments in China’s Tier II and Tier III cities.  The fund is also expected to have a small provision for investing in Asian markets outside of China as the firm looks to grow its investing track record internationally.

The firm declined to comment.