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GreenOak hits $650m hard cap for Japan fund – exclusive

The private equity real estate firm was able to raise bulk of the capital from existing investors in its maiden fund.  

The private equity real estate firm, GreenOak Real Estate, has raised $650 million equity in the final closing of its latest Japan private equity real estate fund.

PERE has learnt that the firm has been successful in hitting the hard cap for GreenOak Asia Fund II, a higher-yielding vehicle that was launched with an initial $500 million fundraising target.

The vast majority of investors who committed capital in GreenOak’s maiden Japan fund which closed on $260 million in 2013, re-upped into Fund II. Most of the fund’s capital – including new investors and around 15 repeat investors – has been invested by Asian and US institutions.

Similar to the first fund’s investment strategy, the capital from GreenOak Asia Fund II will primarily be deployed in office buildings with a potential for repositioning within Tokyo and Osaka. However, as per the fund’s investment blueprint, 20 percent of the capital can be invested outside Japan.

A two-year investment period has been set for the fund which will have a total term of seven years.

The firm has already deployed around 15 percent of the fund’s capital, including the acquisition of an office building in Tokyo from Mitsubishi Real Estate. Net IRRs of mid to high teens are being targeted from the investments.

New York-based advisory firm Hodes Weill & Associates acted as placement agent for the fund.

GreenOak Real Estate’s Asia strategy has been focusing on investing in Japan. The $260 million maiden fund has been fully deployed and is in the firm is in the process of liquidating its investments.

In November last year, the firm also closed its first European vehicle – the Continental European Private Equity Real Estate Fund – on a hard cap of €250 million.

The firm was founded in 2010 by three former heads of Morgan Stanley Real Estate Investing – Sonny Kalsi, John Carrafiell and Fred Schmidt.