UBS China JV fund increases fundraising to $200m

UBS Global Asset Management has captured a $75 million commitment from Netherlands investor PGGM for its JV with Shenzhen-based Gemdale Corporation. The residential focused vehicle has already made its first investments.

UBS Global Asset Management has brought its fundraising total for its joint venture China real estate fund to almost $200 million.

The alternative investment and asset management business of the Swiss bank UBS said in an announcement, it had raised $75 million from Netherlands based investor PGGM Vermogensbeheer, for the vehicle, which would invest in residential assets across the country. The commitment from the PGGM brings the joint venture’s total equity to almost $200 million.

The fund is jointly managing alongside Gemdale Corporation, the Shenzhen-based real estate development and investment management firm, which held $9.8 billion of assets under management as of 30 September.

UBS said Gemdale had already completed two investments which would use $45 million of the committed capital and that an exit from the first investment was expected in the first quarter next year.

The bank said the additional capital would “allow the joint venture product to seek other attractive development opportunities in China’s residential real estate market” which it said is expected to benefit from areas including strong household demand, urbanisation, growing middle class and income levels.

Ke Ling, chairman of Gemdale Corporation, said: “the commitment from PGGM confirms our confidence in the China residential development market and the sustainability of the investment programme for foreign institutional investors.”

John Fraser, chairman and chief executive officer of UBS Global Asset Management, said: “Investor confidence in the collaboration is high and this additional capital will allow this initiative to seek other attractive development opportunities in the Chinese residential real estate market.”

The joint venture was launched early this year. It marked UBS first foray into the Chinese residential market.

UBS’s Global Real Estate business sits within its Global Asset Management division, which has CHF567 billion (€434 billion; $574 billion) of assets under management.