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KaiLong raises capital for second European fund

The Shanghai-based investment manager has so far purchased three properties from its second value-add European fund.

KaiLong Real Estate Investment continues its expansion into Europe with the £24 million (€31 million; $34 million) interim close of its second value-add commingled real estate fund.

The Shanghai-headquartered real estate investment firm launched Outbound Investment Fund II, a follow-on vehicle to its maiden European fund, late last year. So far the fund corpus, raised from Chinese high-net-worth investors and family offices, has been invested in three office properties in London spread over 103,420 square feet.

Hei Ming Cheng, founder, board director and chief executive of KaiLong said the acquisitions demonstrate KaiLong’s ability to help domestic investors deploy capital in overseas properties.

“It is our first step towards setting up a global presence as we will be actively seeking other investment opportunities in offshore markets,” he said.

In March this year, PERE broke news of KaiLong’s overseas foray and the establishment of an office in London. The firm has been working with a London-based operating partner to identify and source office properties with a value-add investing strategy. Fundraising is done via the firm’s Shanghai team.

So far, the firm has been raising domestic capital – family offices, trust companies and retail investors – via small-sized vehicles to fund these offshore deals. Last year it raised £14 million for Outbound Investment Fund I, its maiden vehicle that was then seeded with an empty London office property. The property is currently undergoing repositioning to be converted into serviced apartments.

According to a company statement, KaiLong currently has £100 million in assets under management in London.