LaSalle Investment Management has secured more than $1 billion for its sixth pan-Asian opportunistic fund, PERE has learned.
The Chicago-based firm is targeting $1.5 billion for the LaSalle Asia Opportunities Fund VI, according to an investment report submitted during the Arkansas Teachers’ Retirement System meeting on September 27. That would make it the largest for the series since LAOF III, which closed on $1.9 billion amid the global financial crisis.
LAOF VI will also be the first in the series not to include Mark Gabbay as a key man since he joined LaSalle as chief investment officer of Asia-Pacific in 2010.
Gabbay was elevated to global chief executive at the beginning of the year. His new focus on the overall business means he could not dedicate the amount of time to the fund required by LaSalle’s key person provision, according to the report prepared by the consultancy Townsend Group.
Marc Montanus, fund manager for the LAOF series and fellow key person for LAOF V, will keep the title for LAOF VI. Joining him as key persons will be Asia-Pacific co-CIOs Kunihiko Okumura and Claire Tang, as well as senior managing director Yen Tjin Chan.
Meanwhile, Gabbay will remain the key man for LAOF IV and V as they wind down. Fund IV has just two assets left to exit and is poised for a net return of 28 percent. Fund V recently completed its investment period and is on track for a net IRR of 16.7 percent.
Gabbay has drawn praise for how he ran those vehicles and rebuilt both the opportunistic fund series and the Asia-Pacific business as a whole coming out of the GFC. The 2007-vintage LAOF III ultimately generated a net IRR of 0.3 percent, according to the Townsend report.
LaSalle says Gabbay will remain focused on the region and on LAOF VI from his perch as global CEO.
Gabbay’s departure from the key man role does not seem to have dampened investors’ enthusiasm for the strategy.
LaSalle held a founding close of $600 million for LAOF VI over the summer, with commitments of $150 million each from four investors – a Middle East sovereign wealth fund, an Asian sovereign wealth fund and two US public pensions, according to the Townsend report. Since then, the firm has raised another $435 million for the vehicle.
The fund was slated to have a first close in late September, according to the meeting document. It will target an 18 percent net IRR over an eight-year fund life with a cap of 70 percent leverage. The document did not disclose an anticipated final close date.
As with its predecessors, LaSalle will seek to deploy LAOF VI in the region’s most stable countries. Japan is the largest target market with an intended allocation of 30-40 percent of the fund. China is next at 20-30 percent followed by Australia, South Korea and Singapore.