The Redwood Group, the Singapore-based logistics fund manager, has held a second close on its China-focused vehicle with $280 million of committed capital in total thanks to an additional $144 million commitment from Dutch pension PGGM, according to a joint statement.
Redwood originally launched China Logistics Real Estate in 2012 with a $400 million target, but has now decided to remove the set target. Redwood will no longer market the fund to other investors, but existing investors in the fund have reserved the right to increase their capital commitments as Redwood secures investments. Depending on the pace of investments, the firm and the fund’s investors could decide to bring in other investors on a selective basis, according to firm founder Charles de Portes.
“Currently we understand that existing investors will likely expand their investments in line with capital deployment and do not have a pre-set limit,” de Portes said.
The firm held a €95 million first close on the fund in June 2012, also with a large commitment from PGGM. Now with PGGM making up the vast majority of the China fund’s capital, Redwood has agreed to structure the fund more like a club-style vehicle.
It is expected to have a 10-year life and the firm is targeting value-added returns from its investments.
“This additional commitment fits to PGGM’s policy to invest more capital with a limited number of strategic partners including Redwood,” PGGM’s senior investment manager Thijs Schoenaker said. “As a result, we are able to get access to high quality and sustainable investments, reduce costs and increase control over our investments across our global private real estate portfolio.”
The focus of the China vehicle is distribution and logistics facilities in China’s high-growth markets, driven primarily by the demand of logistics, retail, manufacturing and ecommerce firms in the country. Redwood has already committed most of the China fund’s total capital.
Although this particular fund is now closed, de Portes added that Redwood is still in “open conversations” with other investors about raising capital in other structures. The firm is also expected to invite PGGM to join any such structure.
Redwood is also in the midst of raising a fund for Japanese logistics real estate, for which it held a $237 million second close in December. With most of that capital now deployed, Redwood is expecting to hold a final close on between $300 million and $400 million for the Japan fund before the end of the summer, PERE understands.
Founded in 2006 by Stuart Gibson and de Portes, who were previously in senior roles at ProLogis, Redwood also received a corporate investment from Equity International in August, meant to accelerate the expansion of its Asia platform.