Warburg Pincus to double target for debut Asia real estate fund

The US firm has already started making investments from the vehicle, which will focus on hard assets and is expected to have significant exposure to China.

Private equity powerhouse Warburg Pincus is on track to raise double the capital of its original target for its first Asia real estate fund focused on hard assets.

PERE understands that the US firm is nearing a final close at the hard cap of around $3 billion – double its $1.5 billion original target – after less than 12 months of fundraising, according to four PERE sources.

With a focus on new economy real estate such as data centers, multifamily and logistics, the fund has received strong support from both existing and new investors. PERE can reveal that over 50 percent of the commitments are from institutional investors in Asia. All the sources told PERE that the firm hit the $1.5 billion fundraising mark in the first half of this year and decided to raise its target to accommodate robust investor demand.

The private equity firm first registered the fund with the US Securities and Exchange Commission in March 2021 with a target of $1.5 billion. Samsung Securities was listed as the placement agent for the vehicle.

The fund has already started making investments and China is expected to be a major focus, according to one of the sources.

Warburg Pincus declined to comment on the fundraise.

Prior to launching a dedicated real estate fund for hard assets, Warburg Pincus has been investing in real estate platforms through its private equity vehicles, including its $4.25 billion Warburg Pincus China-Southeast Asia II and the $14.8 billion growth-focused private equity fund Warburg Pincus Global Growth.

Through its private equity strategy, the US firm has shown strong ambitions in the Asia real estate market by backing a number of big industry names in the region, such as ARA Asset Management, ESR Group and Hong Kong’s KaiLong Group. The firm was also behind the merger of ARA and ESR, which later became the Enlarged ESR Group, one of the largest real estate platforms in the region with combined assets under management of $129 billion.

Warburg Pincus has been particularly active in Chinese real estate recently. In July 2021, it teamed up with Shanghai-based asset manager Wensheng AMC to create a $600 million distressed real estate platform, Wensheng Special Situations Asset Management. That same month, Warburg Pincus set up an urban renewal platform called Golden Union Assets to target urban renewal projects in Shanghai and Beijing. Meanwhile, the firm also led a $700 million series A funding into China’s JD Property alongside a consortium of investors in March 2021.