Hong Kong-based private equity real estate firm Phoenix Property Investors is about two months away from a final close on its $600 million fifth Asia fund, having brought in $580 million of capital commitments already.
With a number of potential investors still in the final stages of reviewing the fund offering, the final aggregate commitments may exceed the $600 million target, PERE understands.
Phoenix launched Phoenix Asia Real Estate Investments V about 16 months ago, with Monument Group acting as the placement agent.
The capital raised for Fund V so far comes primarily from approximately 20 investors, comprising public and corporate pension funds, foundations, state endowments, government-related funds and high net worth families from the US, Europe and the Middle East. Of the ten largest investors from all of Phoenix's four previous funds, eight have re-upped into Fund V, while one is new to Phoenix’s vehicles.
The 60-staff firm’s strategy for the fund is focused primarily on redevelopment and adding value to properties in China, Hong Kong and Taiwan, targeting a 20 percent IRR and 2x equity multiple overall, it is understood.
While Phoenix has made investments in Japan before, it is expected to make few, if any, investments in the country from this fund. However, it is also possible that selected investments in Southeast Asia could also be made for this vehicle.
At this point, the firm is understood to have only made one investment for Fund V representing only 10 percent of the vehicle’s capital.
Co-investments are also expected for some of Fund V’s deals. Phoenix’s Fund IV, which collected $460 million and which is now fully invested, is understood to have been invested alongside an additional $340 million of co-investment capital. Fund IV is believed to be projecting IRRs of 22 percent and 2.3x equity, in line with its original targets, with remaining unrealized assets acquired at an average loan-to-value ratio of about 35 percent.
Phoenix declined to comment when approached.
Phoenix was founded in 2002 by managing partners Samuel Chu and Benjamin Lee. The firm has since raised more than $1.8 billion of equity and has managed approximately $4 billion of real estate assets across four private equity real estate funds. The firm is understood to have exited more than 70 percent of the deals it has made across its five funds.