The Hong Kong division at pan-Asia private equity real estate firm, Pacific Star, is spinning out to form an independent business called Pinnacle State Group, PERE has learned.
Pinnacle is led by Wilfred Wong who only joined the Singapore-based company less than last two years ago to source Chinese investments from an office in Hong Kong. During his time at Pacific Star he grew the platform to about 10 staff. They will join him at the new venture.
Wong said Pinnacle would initially invest on a project-by-project basis via club structures alongside local developer Hsin Chong, where he is executive deputy chairman, and a number of high net worth individuals from the fund management industry.
Pinnacle will scout distressed assets and those than can be repositioned, typically in the retail sector. Average investments would be between $60 million and $100 million, and include co-investment from Pinnacle of less than five percent.
“We are looking to reposition shopping malls,” Wong explained, “but will do less in offices as you can only preserve the value of offices in first tier cities. Retail you can do anywhere.”
Wong said the firm, which would remain in Hong Kong, had identified investments in Beijing among other cities and the first investment would likely be completed next year. It will also provide asset management services to a small number of Chinese assets controlled by Pacific Star.
Wong declined to say how much Pinnacle had paid to his former employer for the platform, which was called Pacific Star Hong Kong Limited.
Despite the departure of Wong and his team, Pacific Star is expected to continue operating in China and still has offices in Shanghai and Beijing. The firm said in a response to PERE: “Our operations in these two cities remains unchanged as they are key in supporting our investment advisory work to clients.” The firm said it had replaced Wong with Cho Yoong Chow who will assume the title of chief executive officer, Pacific Star China alongside his current position as group chief financial officer.
Pacific Star added it would continue to work alongside Wong “through other opportunities in real estate investment in mainland China.”
The spin-out by Wong and the Hong Kong team he built while at Pacific Star shortly followed an agreement to terminate the Singapore group’s European joint venture, led by Dirk Wordemann and Matthias Sturmer. Formed in 2008 as a 50:50, the venture was to raise a global fund of funds and raise capital for Pacific Star’s existing funds programme but ultimately never held a closing. Wordemann since joined Aareal Bank while Sturmer joined Capital Dynamics.
Pacific Star was launched in 2001 by founder Jeff Tay. Since then it has transacted more than $5 billion of investments via various funds and mandates on behalf of institutional investors including EGRO insurance group, Société Générale, Kuwait Finance House and Qatar Investment Authority.