Merrill Lynch closes $2.7bn Asia opportunity fund

The Merrill Lynch Asian Real Estate Opportunity Fund is the firm’s first Asia-dedicated fund, which will focus on Japan, China, South Korea and India.

Merrill Lynch has closed it's latest real estate opportunity vehicle, the Merrill Lynch Asian Real Estate Opportunity Fund, on $2.7 billion.

This is the firm’s first fund dedicated to making real estate investments in the Asia region and will focus on direct investments and opportunities in real estate companies.

The fund will focus primarily on Japan, China, South Korean and India, with a secondary focus in Australia and Southeast Asia, according to a statement.

Merrill Lynch sees opportunities in Asian real estate over the medium and long term, according to managing director and head of Merrill Lynch's Pacific Rim global commercial real estate operations, Tim Grady. He said the fund was a natural extension of the bank's real estate investment business.

Fundraising for Asia-dedicated real estate funds has significantly increased over the past year, with a quarter of all funds closed in 2008 to date focused on the Asia region, according to proprietary data from PERE magazine. In August, LaSalle Investment Management closed its $3 billion vehicle which will focus on Japan, China and South Korea.

In September, Merrill Lynch was sold to Bank of America for $50 billion. A statement revealed Bank of America and Merrill will combine their investment management arms.

Merrill’s commercial real estate operation, which includes real estate finance, private equity investments and investment banking services, is reported to be included in the deal. The firm was unavailable for comment by press time.