Secured Capital, the Tokyo-based private equity real estate firm, has brought the total capital raised for its fifth opportunistic fund to approximately $850 million over a series of rolling closings, and is expected to hold its final close within the month, PERE has learned. The firm is aiming for a $1 billion final equity haul for Secured Capital Real Estate Partners (SCREP) V fund, its largest opportunistic vehicle to date.
So far, Secured Capital is understood to have invested $300 million of Fund V’s capital, giving it ownership of about $1.5 billion of assets through that fund. Most recently, the firm was involved in the $1.1 billion buyout of Tokyo’s landmark Shiba Park building, alongside Hong Kong-based conglomerate Asia Pacific Land, sovereign wealth fund Abu Dhabi Investment Council and US foundation CV Starr.
Secured Capital began marketing SCREP V in August 2011, and held a first close on $175 million in July last year. Secured Capital held a second close on $375 million in April, and by July had brought its capital to $450 million this summer, involving both repeat and new investors to the firm, PERE reported earlier.
At this point, more than half of the fund is understood to be comprised of capital from investors re-upping with Secured Capital. About 55 percent of Fund V’s investors are from North America, 30 percent are from Asia, while the remainder come from Europe. It is understood that the proportion of Asian investors in Secured Capital’s funds has greatly increased since the firm’s 1997 inception.
Secured Capital is expected to focus SCREP V predominantly on distress and default situations in the Japan market, although it has a 15 percent target allocation to China. The firm has been investing in China opportunistically since 2005, but its capabilities in that country increased following the firm’s 2010 merger with Hong Kong-based private equity firm Pacific Alliance Group (PAG). The firm’s current pipeline, however, is understood to be made up of mostly deals from Japan.
SCREP V is expected to run for eight years with options for two one-year extensions. According to previous PERE coverage on the fund, its investments are expected to yield IRRs of between 17 percent and 20 percent and a 2x equity multiple. Secured Capital declined to comment.