Gaw fully invests second US fund

The firm purchased a hotel in Oakland, California to finish out the $315m value-added vehicle.

Gaw Capital Partners has finished investing its second US fund, the firm said Tuesday.

In its last deal from Gaw Capital US Value Add Fund I, Gaw bought the Oakland Marriott City Center in California for $143 million from a joint venture comprising private equity firm Apollo Global Management and private equity real estate firm DiNapoli Capital Partners, according to data provider Real Capital Analytics. The 500-room hotel was built in 1983 and renovated in 2011.

“The purchase of Oakland Marriott City Center demonstrates our unique ability to capitalize on favorable macro dynamics in an ‘up-and-coming’ market like Oakland through an acquisition of what we believe to be a marquee asset,” Valerie Yip, the firm’s co-head of US acquisitions, said in Tuesday’s statement.

The Hong Kong-based firm closed the fund, also known as US Fund II, on $315 million in October 2015 after just over a year in the market, PERE previously reported. Gaw used capital from the fund to invest in office and hospitality properties across the US, with an internal rate of return target in the mid-teens. Current returns for the fund are not publicly available.

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 and Ohio Bureau of Workers’ Compensation each earmarked $50 million for the vehicle, according to PERE data.

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, according to Tuesday’s statement.

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