Hong Kong-based private equity real estate firm Gaw Capital Partners has reached a $1.2 billion first close of its latest pan-Asia opportunistic fund.
With a hard-cap of $2.5 billion, the firm’s seventh Asia-Pacific real estate fund Gateway Real Estate Fund VII has raised $1.2 billion alongside an additional $400 million sidecar since its soft launch during the summer. Once completed, this would become the firm’s largest fund to date, beating its $2.18 billion predecessor Gateway Real Estate Fund VI. It is understood that 35 percent of Fund VII’s investors come from Asia, 12 percent from North America and 53 percent from Europe and the Middle East.
Following an opportunistic investment strategy similar to its predecessor Gateway funds’, Fund VII targets real estate assets with a focus on logistics and data centers. However, Gaw will also add medical, life sciences and research-related assets to the strategy of its latest fund. The firm does not have a target allocation for these new sectors.
Christina Gaw, managing principal and global head of capital markets, said in a release that the firm’s increased expansion into thematic platforms such as data centers, healthcare and education-related real estate platforms are well supported by its investors as reflected in its latest fundraise.
It is understood that the series’ exposure to industrial sector has increased by more than 2.5 times from Fund IV to Fund VI. Meanwhile, commercial offices have taken up around 30 to 40 percent of its portfolio from Fund IV to Fund VI. The rest of the allocation is diversified between experiential/non-discretionary retail, mixed use, residential and hospitality.
The firm’s Fund VII launch came shortly after the $2.2 billion final close of Fund VI in December 2019. Fund VI is close to being fully deployed and had realized two investments, including Gaw’s first proptech investment in integrated online and offline Chinese real estate brokerage platform Beike. PERE understands that the firm has an average target multiple of 1.7x to 2x for both Fund V and Fund VI.
Apart from the series’ steady diversification of property types, the firm’s co-investment sidecars have continued to grow and attract more investors. Gaw Capital began raising co-investment vehicles with Fund IV after some early co-investment successes with previous funds. Over time, the amount of capital the firm has raised for co-investments has surpassed the equity raised for its blind-pool funds. According to sources with knowledge of the situation, the firm had raised a total of $4.5 billion across the main funds of Fund IV to Fund VI, while the co-investment pool across these three vehicles totaled around $5 billion.
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