SC Capital Partners, the Asia private equity real estate firm founded by ex-Westbrook Partners executive Suchad Chiaranussati, is entering unchartered waters with the launch of its first core real estate fund. SC Capital declined to discuss its capital-raising plans, but PERE understands the firm is aiming to secure transactions for the vehicle that offer lower risk and return characteristics than its main series of opportunistic funds.
SC Capital is targeting $400 million for the vehicle, which will be structured as a closed-ended vehicle in a departure from typical core real estate funds. It is common for core real estate funds, and certainly those that have been launched in Asia so far, to be structured as open-ended. They typically have an indefinite lifespan, and investors are able to trade units periodically.
The majority of investments made via SC Capital’s new strategy are expected to happen in Asia’s gateway cities. Assets acquired are to be predominantly in the office and retail sectors and will already be income generating. Accordingly, the fund’s capital is not slated to be used to invest in development.
Investments are expected to generate a real return of between 6 percent and 8 percent and an IRR of 12 percent.
Since its inception, SC Capital has raised almost $1 billion for its Real Estate Capital Asia Partners (RECAP) opportunity fund series and has grown a platform of about 30 staff to run it. However, the introduction of a core vehicle is expected to precipitate the formation of a dedicated investment and management team, likely to be approximately six-strong in the first instance, and led by SC Capital managing director Freddy Chua.
In so doing, SC Capital joins a growing list of real estate investment managers to offer international institutions commingled investment funds expressly for stabilized, income producing assets. Others to do so include: M&G Investments, LaSalle Investment Management, Invesco Real Estate and Pramerica Real Estate Investors.
Both the fund and its management team are expected to be in place by the end of the year or in the early months of next year. No placement agent has been appointed to help market the fund at this stage, it is understood.