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ING captures $772m fund from Japan’s New City Corp

ING Real Estate has been awarded the management of a Tokyo based pan-Asia real estate opportunity fund after its previous manager ran into financial difficulties. Following the deal, ING Real Estate now manages $4.97 billion of assets across Asia.

Netherlands-based ING Real Estate has assumed the management of Tokyo-based New City Asia Fund Management’s pan-Asia real estate opportunity fund after the fund manager’s parent New City Corp ran into financial difficulties.

The deal to switch the management was completed at the end of March, one month after New City Corp fell into negative net worth and its capital base had fallen below the statutory required level.  The deal was completed to enable New City to avoid risking its third party managed assets becoming embroiled in its corporate situation.

ING RE said in a statement: “To avoid these third party assets becoming embroiled in the situation, the fund decided to seek a new asset manager to continue the management of the assets in the best interests of all of the fund's investors.”

In April, Japan’s Financial Services Agency ordered New City Corp to suspend all operations until 21 June and issued the firm with a business improvement order to prevent the company from improperly offloading its assets.

ING RE will rebrand the $772 million closed-ended vehicle Phoenix Real Estate Fund. The firm has also hired a small number of New City Asia Fund Management staff to continue servicing the vehicle.

Richard Price, chief executive for Asia at ING Real Estate Investment Management, said: “We are delighted that a small number of the New City team has chosen to join us to ensure stability and continuity in the management of the Fund’s assets. We are especially thankful to the fund’s limited partners and advisors for the confidence and trust they have shown in ING and our real estate team in the region.”

The fund, which has 27 limited partners, all of which approved the change in management, is 76 percent invested. It has acquired properties in Japan, China and South Korea and has invested in the residential, industrial and development sectors.

The mandate with bring ING RE’s assets under management in Asia to $4.97 billion and $87.3 billion globally.