Real Summit Investment, the real estate investment subsidiary of the Hong Kong Monetary Authority's Exchange Fund, has reportedly invested $1.15 billion in a 49 percent stake of a New York office property 3 Bryant Park.
Citing property records, a report from The Real Deal said Real Summit acquired the stake from the Canadian investor Ivanhoé Cambridge and Chicago-based real estate investment firm Callahan Capital Partners.
A spokesperson for the Hong Kong Monetary Authority declined to comment.
Ivanhoé and Callahan purchased the skyscraper, located at 1095 Avenue of the Americas in Manhattan, New York, for $2.2 billion from real estate behemoth Blackstone in January 2015.
Blackstone took ownership of the property back in 2007 as it was part of the Equity Office Properties Trust (EOP) portfolio Blackstone inherited when it took over EOP for $39 billion in 2007.
The property's latest investor, HKMA, is the de-facto central bank of Hong Kong and must control the exchange rate of the Hong Kong dollar. Given that the Hong Kong dollar's value is linked to the US dollar by government policy, the HKMA has to hold US dollar-denominated assets in reserve to maintain the link.
“To diversify risks, we decided to allocate, in a prudent and incremental manner, a small portion of the Exchange Fund to alternative asset class comprising global private equity and overseas real estate,” HKMA's deputy chief executive Eddie Yue said in a December speech.
HKMA manages close to HK$3 trillion in the Exchange Fund, of which almost HK$2 trillion is held in debt securities. A small part of this fund has been set aside into something called the 'Long Term Growth Portfolio', which has close to HK$89 billion in assets, three quarters of which is comprised of private equity investments. Real estate investments take up the remaining one fourth.