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Gaw Capital launches next US fund – Exclusive

The Hong Kong-based firm finished investing its last fund earlier this month with the purchase of Oakland Marriott City Center in California for $143m.

Gaw Capital Partners is back in the market with its latest US value-added fund, PERE has learned.

The Hong Kong-based firm declined to comment, but PERE understands that the firm is seeking to raise between $350 million and $400 million for Gaw Capital US Value Add Fund II, also known as US Fund III.

The firm closed its predecessor vehicle on $315 million in October 2015 after just over a year in the market, PERE previously reported. Last week, the firm said it had finished investing capital from the fund with the purchase of the Oakland Marriott City Center in California for $143 million.

Gaw is continued the same investment strategy from Fund II, focusing on creative office and hospitality in growing, highly-educated cities.

For the latest vehicle, Gaw is targeting a net internal rate of return of 14-17 percent gross, while the firm has a 17 percent net IRR target for Fund II. To date, the firm has exited one small project in Fund II with a 42 percent IRR. The firm also has a US club vehicle, US Fund I, that closed in 2012 on $110 million. That vehicle’s nine realized investments have a 35 percent realized IRR.

The firm is also pursuing a similar investor base as those that committed to its previous vehicle. About half the investors in US Fund II are Asian and the other half are American, including pension funds, high-net-worth individuals and endowments. San Francisco Employees’ Retirement System and Ohio Bureau of Workers’ Compensation each earmarked $50 million for the vehicle, according to PERE data.

Gaw has not used a placement agent for the fund series.

Founded in 2005, the firm has over $12 billion of assets under management.