HSBC Asset Management is purchasing Singapore-headquartered private equity real estate firm SilkRoad Property Partners as it builds out its real estate business, PERE has learned.
The global asset manager is in the process of acquiring SilkRoad Property Partners Group and its associated active funds, a spokesperson from HSBC AM confirmed to PERE. The firm did not disclose an expected close date for the transaction.
With offices in Singapore, Hong Kong, Shanghai and Tokyo, SilkRoad has $2 billion of assets under management. Currently, it is in the early stage of marketing its fourth flagship value-add fund SilkRoad Value-Add Fund IV with an initial target of $600 million, according to PERE data. In April 2023, the firm entered the Japanese market by purchasing a portfolio of six assets in Greater Tokyo for $150 million under its value-add strategy. Prior to that, it launched its first open-end core-plus fund SilkRoad Structural Core Fund in 2022.
The acquisition of SilkRoad is part of HSBC AM’s broader plan to “expand its Asia-Pacific real estate investment capabilities under its HSBC alternatives business,” according to the spokesperson. Last year, the group appointed Victoria Sharpe as head of real assets to lead the strategic development and management of its real assets business. Before that, Sharpe was hired from DWS in 2021 to become the head and chief investment officer of the manager’s real estate division in Asia-Pacific.
The purchase of SilkRoad and the hire of Sharpe came after HSBC AM’s consolidation of its alternatives business into one unit called HSBC Alternatives in 2021. As of September 2023, the alternatives unit had AUM of $67 billion. Joanna Munro, former global chief investment officer of HSBC AM, was tasked with leading the new combined unit. It is understood that the firm had no AUM in real estate under its alternatives unit prior to the SilkRoad acquisition.
“We have been very successful in delivering innovative capabilities to our institutional and wealth clients, with the recent success of our infrastructure debt teams, the rapid growth of our indirect private equity business, the launch of a direct lending investment capability with HSBC UK and the establishment of our climate tech venture capital team. With Joanna’s strong track record of building and transforming businesses, I am confident that we will take our alternatives business to the next level and accelerate this important growth opportunity,” Nicolas Moreau, chief executive officer, HSBC Asset Management, said in a statement.
The UK group previously had a dedicated real asset platform called HSBC Specialist Investments before the team was spun out and renamed InfraRed Capital Partners in 2011, according to a PERE report. Back then, the platform had more than $4 billion of capital under management and 80 staff across London, Hong Kong, New York and Paris. Following the spin-out, HSBC retained an 19.9 percent stake in the platform. The decision to split was driven by “increasing regulation which stands to make banks’ investment and management of funds in the alternative sectors harder,” according to the report.
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