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ASIA NEWS: Asia’s merry-go-round

It is a case of new chapter, new faces at AEW Asia, the Asia platform of Boston-based real estate investment management firm AEW Capital Management. That is because last month saw the arrival of industry veteran David Schaefer and two of his colleagues to take the helm of the business, which has $2 billion in assets under management.

Schaefer’s unveiling as AEW Asia’s managing director and regional head was the latest rotation in a senior executive merry-go-round in Asia private equity real estate circles this summer. Following discussions with previous employer DTZ Investment Management, Schaefer and his colleagues, Jason Lee and Michael Moon, spun out their fledgling platform in August. Months before that, AEW decided to part ways with previous head Peter Wittendorp and his senior team as they set up a boutique firm called SilkRoad Property Partners.

At DTZ, Schaefer tried to raise a $400 million vehicle called Aveny Asia Real Estate Partners to invest opportunistically in Asia’s gateway cities. While his efforts were impeded by both a general fundraising malaise and the corporate uncertainty that came with DTZ’s sale to Australian engineering and construction firm UGL, AEW saw potential in the vehicle and intends for its second Asia value-added fund to share certain of its characteristics.

Elizabeth Herlihy, director at AEW Capital, told PERE that AEW Value Investors Asia (VIA) II is still a work in progress. However, the fund would maintain Schaefer’s gateway cities strategy and investments could be made in Hong Kong, Taipei, Seoul, Shanghai and Singapore. “While we are still working on the details for VIA II, both funds have similar investment strategies and terms, which is why David and his team were such a great fit for AEW,” she said. When it does hit the market in early 2013, the fund is expected to have a $500 million equity target.

Although Schaefer’s watch already has started, there will be a short overlap with Wittendorp’s involvement with AEW Asia before links are severed completely. That is because SilkRoad was retained as portfolio and asset manager for the platform’s first Asia fund – AEW Value Investors Asia, which closed on $557 million in 2008 – at the request of its investors. Herlihy said the fund’s final two investments should be exited within six months and SilkRoad would not have a role to play in VIA II. By then, Schaefer should have hit the fundraising trail once again.