LaSalle Investment Management, the real estate investment management business of global property services firm JLL, has started preparing the launch of its fifth pan-Asia opportunistic real estate fund. LaSalle Asia Opportunity Fund V (LAOF V) is expected to be launched in the first quarter of 2016 with a $750 million fundraising target.
The target for LAOF V is higher than its predecessor in the firm’s Asia opportunistic fund series. LaSalle closed LAOF IV with $585 million of equity in June last year, of which $485 million was raised for the blind-pool vehicle itself while the remaining $100 million was co-investment capital for China logistics deals.
However, the new fund’s target is a smaller size than LAOF III, historically one of the firm’s largest funds in the region. LaSalle had raised $2.9 billion for LAOF III in 2008 but the vehicle’s performance was temporarily impacted by the onslaught of the global financial crisis (GFC). One of that fund’s investors, New Jersey Division of Investment (NJDOI) included the vehicle as part of a portfolio of real estate fund interests that it sold to NorthStar Realty Finance that year.
Aside from NJDOI, other investors which previously have committed capital to LaSalle’s opportunistic series include sovereign wealth funds and pension funds from the US, Middle East and Europe. The San Diego City Employees’ Retirement System had $5 million invested in LAOF IV as of March this year, with approval to commit a total of $50 million, according to information on its website. The Arkansas Teachers Retirement System has also reportedly invested $30 million in the same fund.
The investment strategy of LAOF V is not known yet. However, the predecessor funds were invested in Australia, Japan, China and South Korea.
A number of investment managers are understood to be plotting the launch of opportunistic funds for the region, indicating the continuing demand for high risk/return strategies. Data compiled by PERE Research & Analytics suggests that there are 27 Asia-focused opportunistic private equity real estate funds currently raising capital, with a combined fundraising target of $7.13 billion. In 2015 alone, five opportunistic funds in the region have announced a final close.