Having been selected by the LPs of the New City Asia Opportunity Fund as its replacement GP, ING Real Estate Investment Management has won another rescue mandate.
The firm, which is lead in Asia by chief executive officer Richard Price, has been selected as a replacement GP for Creed Real Estate Partners, the ¥56.6 billion (€456 million; $613 million) real estate private equity fund previously managed by Tokyo-based Creed Group.
Like New City, Creed also faced financial difficulties in 2009, forcing it to offload various investment platforms. In December 2008, it sold the management of an office REIT, while market rumours of the sale of the blind pool fund surfaced as early as last summer, culminating with last month’s appointment of ING REIM. Creed eventually filed for bankruptcy protection.
The New City appointment, which happened last year, saw ING REIM emerge as the replacement GP following a beauty parade of asset managers. Price said the appointment as replacement GP for the Creed fund followed a recommendation by some of the LPs which are in both the Creed and New City funds. “There wasn’t much of a beauty parade. This time the investors approached us directly,” he said.
Price said the firm’s brief is simply to manage the fund, to be renamed Nozomi Real Estate Fund, and maximise a return on its equity. The fully invested vehicle currently has approximately $1.1 billion of gross assets under management – bringing ING REIM’s total assets in Asia back to $5 billion following comprehensive sales of its Korea portfolio. The assets, predominantly offices and residential in the greater Tokyo area, are leveraged at about 60 percent loan to value against current valuations, Price said, and would need “loan work” done.