MGPA, the Asia and Europe-focused private equity real estate firm, has raised €85 million exclusively from German institutional investors for a core-plus Asian real estate fund.
The company, which manages a total of $11 billion of assets in its two main markets, has held a first close for MGPA Asien Spezialfonds, with three German-speaking investors committing to the vehicle with an overall target of €500 million.
MGPA’s established investor base was told of the milestone today.
MGPA began marketing Asien Spezialfonds last year in response to German institutional investors having an appetite for ‘less risky’ assets while at the same time wishing to diversify outside their national borders. In response, the firm set up the Asia core-plus offering, structuring it as a German ‘KAG’ company under the umbrella of independent investment company, Universal-Investment. Selinus Capital, the Germany-based firm, is acting as the placement agent.
John Saunders, chief executive officer for MGPA in Asia, said in a statement on the fund close that the most interesting markets at the moment for creating low risk real estate returns lay in Japan, Australia and Hong Kong. The other established markets targeted are Singapore and Malaysia.
Simon Treacy, global chief executive officer, said Germany was currently “a sweet spot” to raise capital, particularly for Asia. He added there would be another close of MGPA Asien Spezialfonds before the end of the year. “There is a substantial list of investors entering due diligence following the three investors that have committed so far,” he said. “We spotted this opportunity around a year ago and moved pretty quickly to assess the market, the size of it and the competition.”
MGPA, which has 13 offices and employs 240 people, is diversifying its product range from being a purely opportunistic fund manager. Treacy explained that executing on “good risk adjusted deals up and down the risk spectrum” helped cement the firm’s profile as a “buyer” so that it saw a wide range of deals, thus helping to motivate the team further. “We are doing what we said we would do, which is diversifying the platform in terms of broadening the range of products and services, and the range of capital.”
In 2011, as well as launching the MGPA Asien Spezialfonds, it became sub advisor to two unlisted REITs managed by Florida-based CNL Financial in order to again expose to the US high net worth and retail investor market.
Meanwhile, it continues to invest MGPA Asia III, its $3.9 billion monster opportunity fund raised in 2007. In Europe it is currently on the fundraising trial for MGPA Europe IV. It held a first close of $100 million last November and is targeting €600 million overall. In a departure from Europe Fund III, the fund is concentrating on four markets, the UK, France, Germany and Poland, in order to take advantage of current market dislocations and recapitalisations.