TAN-EU Capital has closed a $400 million club vehicle targeting China’s second tier cities raising capital from a group of institutional LPs and its founding investment partner.
SoTan China Real Estate I corralled $200 million from a small group of LPs, believed to be less than five, and $200 million from Shui On Construction and Materials (SOCAM), the listed Hong Kong subsidiary of Shui On Group, which helped TAN-EU launch in 2009.
In a statement, founder Rachel Renucci-Tan said the firm’s debut vehicle closed within 14 months of fundraising. “Given the difficult environment for raising capital for real estate investments over the past year, and given that this is a first-time fund, we are very excited to have closed on this transaction in such a short period of time,” she said.
The vehicle will target primarily residential anchored mixed-use developments in China’s second tier cities, particularly the projects of smaller to medium-sized developers who have been hit by the government’s attempt to dampen the property market. TAN-EU will act as the fund manager while SOCAM Asset Management will act as the asset manager. TAN-EU and SOCAM will act as GP having discretion over the investment strategy and investment guidelines.
SOCAM chief executive officer Philip Wong added the listed firm had been “actively exploring ways to expand and strengthen” its portfolio, bolster its “special situations business” and “deliver valuable returns to our investors”.