ASIA NEWS: Graduation time

As Asia’s private equity real estate market embraces the advent of the post-credit crunch cycle, new names are throwing their hats into the ring by launching blind pool, commingled funds.

Narrow investment remits are at the heart of the strategies of two of Asia’s firms hoping for success with their first fund efforts.

Hong Kong-based Asia Pacific Land and Auckland’s Du Val Group are both hoping to make an impact with opportunistic high-risk, high return funds.

Led by former Warburg Pincus Asia real estate head Philip Mintz, Asia Pacific Land (APL) has started raising a Tokyo residential fund. Targeting $200 million in equity, APL plans to generate 15 percent net IRRs by selecting value-add opportunities within the 22 wards of Japan’s capital.

Mintz believes investors are keen to partner directly with local experts rather than with a global private equity giant. He said: “For global firms it’s hard to have local expertise. Some of the bigger guys are experts and they should survive but LPs should consider fee [implications].”

Fund of funds and pension funds are among the first kinds of investors to register interest in investing in the fund. APL has already identified part of its investment pipeline and expects to hold a closing on the lion’s share of its equity target by October.

Australasia-focused Du Val was born out of the UK-based Clarke family office. The firm invested on an asset by asset basis originally, but after building a 20 percent return track record on investments, it felt the time was right to raise funds.

Du Val’s first opportunistic fund will be a NZ$250 million (138 million; $178 million) mid-market vehicle for offering Chinese high-net-worth and small institutions exposure to New Zealand real estate. William Nobrega, managing partner of the Conrad Group, which advises Du Val, insisted: “New Zealand has transparency and significant amounts of predictability – things China doesn’t have,” he said.