ING RE launches second China fund

ING Real Estate has launched a second China focused real estate opportunity fund. The vehicle is targeting up to $750 million in equity, is aiming to invest principally in residential assets and plans to make individual investments of between $50 million and $70million.

ING Real Estate, the property arm of Dutch financial group ING, has launched a second China focused opportunity fund aiming to capitalise on “distressed pricing”.

According to an interview by Reuters with ING RE’s head of China Richard van den Berg, the firm aims to raise up to $750 million for a vehicle that will predominantly target residential assets.

The fund aims to make investments of between $50 million and $75 million and to provide a return of 20 percent or more to its investors. A first closing is expected before the end of the fourth quarter this year. A final close is expected at the end of next year.

News of the new vehicle comes in the same week that ING RE increased its assets under management in Asia to $4.97 billion after winning a mandate to manage $772 million in assets in Japan previously managed by troubled real estate company New City Corp’s pan Asia opportunity fund, New City Asia Fund.

In the interview, van den Berg said: “If you go for very high returns, then you want to make use of distressed pricing, and clearly the U.S. and London offer opportunities that China does not,” van den Berg said on the sidelines of a property conference.

“But if you want to invest in a growth market which is robust, and which has very strong underlying demand, then I think China offers very good opportunities and very attractive returns.”

The second vehicle would be the follow-up to ING RE’s first China opportunity fund which was launched in 2004 and which raised $500 million of equity. That fund invested in nine projects in partnership with four Chinese developers including Gemdale Corp and Shanghai Forte Land.

The expansion in opportunity funds under management in Asia comes despite having frozen an attempt to launch a global vehicle earlier this year, as PERE reported.