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Gaw Capital holds $314m final close for US fund – exclusive

The Chinese firm has closed its first value-added US real estate fund above its $300 million target.

Gaw Capital Partners, one of China's largest private equity real estate firms, held the final close for its first value-added US real estate fund last week.

Gaw Capital US Value Add Fund I garnered $314 million in commitments, excluding co-investments, after just over a year on the market. The Hong Kong-based firm is targeting an internal rate of return in the mid-teens, according to sources familiar with the fund.

Gaw is investing in creative office and hospitality assets. The firm has invested about half of the capital in the vehicle so far, acquiring West Coast assets from Portland, Oregon to San Diego. In 2014, Gaw also seeded $40 million from the fund into a joint venture with Chicago-based AJ Capital to develop Graduate Hotels, a hotel platform targeting university-anchored towns.

About half the investors in the vehicle are Asian and the other half are American, including pension funds, high net worth individuals and endowments. San Francisco Employees' Retirement System committed $50 million, according to PERE Research & Analytics.

In recent transactions, Gaw sold a Silicon Valley office complex in October for $165 million, booking an internal rate of return of 40 percent. Its other exits have averaged an internal rate of return of over 60 percent, according to sources familiar with the deals.