Global logistics powerhouse GLP has closed its first income fund in China as investors remain positive about the logistics sector amid covid-19 market disruption.
PERE understands that GLP took around eight months to complete fundraising for the 15 billion yuan ($2.1 billion; €1.95 billion) GLP China Income Fund I, which was launched in August 2019. The vehicle has commitments from a total of seven domestic institutional investors, the majority of which are understood to be insurance companies. Six of the seven limited partners were first-time investors with the firm.
Fully-seeded with 34 stabilized assets in China from its balance sheet, GLP CIF I reached a first close in October last year, with three investors committing over half of the total equity raised. The rest of the capital commitment was confirmed during the first quarter, when four more investors joined the club.
Teresa Zhuge, executive vice-chairman of GLP China, told PERE that most of the marketing for the fund was completed before the outbreak of covid-19 in China. But she noted that GLP offered virtual site visits to investors via video for the first time after travel was restricted in the country due to the coronavirus outbreak.
Zhuge told PERE that investor demand for China logistics remains strong and the performance of GLP’s assets continue to be resilient during the outbreak. “After the outbreak of covid-19, it became more clear that the role of logistics is fundamental to modern society. Infrastructure is essential to store and deliver resources,” she explained. Not only were most of its warehouses open during the pandemic, the firm was the first player in China to volunteer over 100 warehouses in 40 cities for relief efforts during the crisis.
“After all, the effect of the pandemic is global. Although the performance of our assets are quite resilient at the moment, it is too early to conclude the pandemic’s impact on the global economy or the logistics sector,” she added.
Going forward, the firm will continue to invest in different sub-sectors of logistics. “We have been investing in the automation and digitalization of the logistics ecosystem in the past five years, as well as asset services. We believe this will be even more important as a result of the pandemic and we will definitely see more opportunities arising from here going forward,” said Zhuge.
In 2018, GLP raised 10 billion yuan for its first private equity fund, Hidden Hill Modern Logistics Private Equity Fund GLP, to invest in “companies employing technology to enhance efficiency in the logistics industry.” It is understood that the firm has already deployed 4 billion yuan to date from the vehicle.
GLP currently manages six China real estate and private equity funds, which encompass approximately $19 billion in total AUM. GLP CIF I is the firm’s third China-focused vehicle to pursue a capital recycling strategy. The company also manages GLP China Value-Add Venture I & II, which were launched in 2018.