A Hong Kong-based manager is tapping wholesale investors in Australia and NZ for a new closed-end real estate debt fund targeting assets in the Asia-Pacific region.
The Sun Hung Kai & Co (SHK) fund is looking to raise between US$200 million to US$300 million for the new real estate strategy that will invest in first and second mortgages on commercial and residential property. Sun Hung Kai has already committed US$100 million to the strategy.
Multiple Capital Investment Partners (MCIP), the Sun Hung Kai in-house real estate investment group, would manage the underlying fund, according to a spokesperson for the group.
“The Fund is registered in the Cayman Islands and is managed by the MCIP team in Australia (operating under a Australian Financial Services Licence) and Singapore (operating under an MAS exemption). SHK & Co. supports MCIP through its SFC-licensed subsidiary, Sun Hung Kai Capital Partners, based in Hong Kong,” the spokesperson said.
“The primary target [investment] markets include Australia, New Zealand, Hong Kong, Singapore and South Korea. The Fund can also invest in Greater China (PRC, Macau, Taiwan), the United Kingdom and select EU countries if appropriate opportunities are found.”
Investors will need to stump up at least US$5 million to buy into the fund although the manager retains some discretion to accept lower amounts.
“The total fund life is five years from the final close, and can be extended by one year,” the spokesperson said. “The fund can recycle capital from investments that are exited in the first two years, then will return capital to investors as deals are exited.”
As well as aiming for capital gains, the manager intends to pay a twice-yearly dividend to investors, the spokesperson said.
MCIP portfolio managers Rai Katimansah and Simon Tozer, based in Singapore and Melbourne, respectively, would head the investment strategy. Dean Lear and Michael Chau would also join MCIP from associated firm Multiple Capital (itself a subsidiary of broader real estate investment group, Mulpha Capital) to help manage the new fund.
In a release, Katimansah and Tozer said: “We see compelling investment opportunities to make attractive risk-adjusted returns by extending loans to well-established borrowers across APAC markets where MCIP and SHK & Co. have strong deal sourcing networks and execution capabilities. The strategy is yield driven and offers downside protection for those looking for carefully risk managed access to both the real estate lending market and the APAC growth story.”
Founded in Hong Kong in 1969, SHK manages about US$5.6 billion across listed, real and alternative assets.