Two years after setting up shop, real estate investment management firm, SilkRoad Property Partners, has raised the first capital for its debut Asia-focused real estate fund.
In December 2014, PERE broke the news that the Singapore-based firm raised $230 million equity in the first close for SilkRoad Asia Value Partners – a close-ended vehicle with a value-add strategy.
The firm, a spin-out from the Asia business of Boston-headquartered global real estate fund manager AEW, has set a target of $350 million for the fund, with the remaining capital scheduled to be raised within the next 18 months. The LPs that have committed so far are thought to be largely European institutional investors, including insurance companies and provident funds.
Capital from the eight-year SilkRoad Asia Value Partners is expected to be deployed in markets such as Hong Kong, Singapore as well as Tier 1 Chinese cities including Shanghai, Beijing and Shenzhen. All asset classes are being considered for investment.
Led by managing partner and fund manager Peter Wittendorp, who headed AEW’s Asia operations before moving on to establish the boutique firm, SilkRoad also has five other former AEW executives.
They left in 2012 with a mandate as portfolio manager and sub-advisor to AEW Value Investors Asia, AEW Asia’s first dedicated fund for the region was raised during the onslaught of the financial crises in 2008. That fund’s strategy was similar to SilkRoad Asia Value Partners in that it was invested in value-add opportunities in Shanghai, Hong Kong and Singapore among other cities.
Wittendorp declined to comment. But a fund manager who spoke with PERE, on the condition of anonymity, explained that a fund manager’s past track record does give some credibility and opens doors when he’s out raising capital independently.
However, he did add a caveat: “In the case of large organizations, investors have a greater relationship with the institution than the fund manager. People are less important than the brand. In such a case, there could be less success in pulling out the investors.”
AEW Value Investors Asia attracted $558 million in equity in 2008 and was fully exited in July 2013 with a net IRR upwards of 13 percent and an equity multiple of 1.42x – understood to be among the highest return generating funds of its vintage.
It is believed that some of the LPs who have committed capital for SilkRoad’s fund had invested in AEW funds previously.
With the bulk of the fund’s target already raised, it remains to be seen if SilkRoad can further leverage on the team’s achievements while at AEW for additional capital collections.