Hong Kong-headquartered Gaw Capital Partners has extended its real estate offerings into property technology by introducing its first growth equity fund, PERE can reveal exclusively.
With a $400 million fundraising target, Gaw is understood to have corralled approximately $200 million for Gaw Growth Equity Fund I. The vehicle has received investments from a number of institutional investors in Gaw’s flagship real estate fund series. Launched about a year ago, it invests in real estate related innovations that have progressed beyond Series C funding. To date, it has deployed over one-third of the capital it has raised.
Led by Herbin Koh, director and growth equity lead at Gaw Capital Partners, the firm’s growth team has five members in both Hong Kong and Shanghai office. The private equity real estate firm started making investments into real estate related growth equity in 2016 with its own balance sheet and flagship fund capital. It has completed 11 investments in the space with capital across different pockets so far.
Humbert Pang, managing principal at Gaw Capital Partners, told PERE that the firm started raising third party capital for real estate technology because it saw growing interest from its investors and peers to tap into the space. “They naturally want to look for a familiar partner with a track record in the field,” he explained.
Prior to launching Gaw Growth Equity Fund I, the firm had committed more than $100 million in private equity deals from its $2.2 billion pan-Asia opportunistic real estate fund Gateway Real Estate Fund VI, as PERE had previously reported. For example, Gaw invested in Chinese online real estate brokerage platform Beike in November 2018. Pang declined to disclose the return on Beike but pointed out that the platform’s revenue has increased by 60.6 percent from 2018 to 2019. Apart from China, the firm has also grown its private equity exposure to South-East Asia and Europe. It has backed Vietnam’s largest online brokerage firm Proxy and US smart building platform Switch Automation.
Christina Gaw, managing principal and head of capital markets at Gaw Capital Partners, told PERE in a previous report that many of the firm’s private equity investments are related to real estate: “Given that almost all activities, such as shopping, education, entertainment and healthcare, ultimately need a suitable space to carry out or enhance the experience.”
As a real estate owner, Pang also noted that the firm can provide a testing ground for innovation. For example, sensors produced by Switch Automation were applied in Gaw’s properties in Singapore. “Some real estate technology might only be a real estate enabler if it is being applied to a single asset. But if it is being applied to a broader real estate portfolio like the ones we have, it can become a profit center. And it is a new business channel for us,” Pang explained.