Alpha Investment Partners Limited (Alpha), a private fund management arm of Singaporean asset manager Keppel Capital, announced that it has secured a S$360-million ($268 million) separate account mandate from Dutch pension fund manager PGGM.
The separate account mandate provides PGGM access to Asia’s real estate market, where, according to data from JLL, investment volumes are expected to rise 15-20 per cent this year, driven by continued growth in appetite for assets with income stability.
The fund – Alpha Asia Separate Account – will focus on core-plus opportunities, predominantly in commercial real estate in key cities in Japan and China, as well as in Singapore.
According to the announcement, the mandate includes a top-up option of up to S$320 million, bringing the aggregate commitment for the separate account mandate to S$680 million if the top-up option were fully exercised.
The mandate is not the first transaction between PGGM and Alpha Investment. According to Alvin Mah, Alpha’s CEO, PGGM has invested in various Alpha-managed funds over 15 years.
“The new investment mandate bears testimony to the confidence that institutional investors have in Alpha’s capabilities in delivering sound returns for our investors,” Mah said.
In a joint statement, Jikke de Wit and Ping Ip from PGGM Private Real Estate said the investment reflects the dutch pension manager’s confidence in Asia’s long-term growth prospects and Alpha’s ability to identify attractive opportunities in the market.
As of December 31, 2020, PGGM had 266 billion euros ($313 billion) in assets under management and was administering pension of 4.4 million participants.
Alpha Investment, on the other hand, has executed 190 transactions with gross acquisition value of more than $26 billion for its managed funds since 2004. Its strategy includes core, core-plus, value-add, and opportunistic.
The separate mandate from PGGM comes less than six months after Alpha announced a $295-million first close of Alpha Asia Macro Trends Fund IV (AAMTF IV). The fund has a target size of $1 billion. The fund is the fourth pan-Asian vehicle in Alpha’s flagship Alpha Asia Macro Trends series.
The series, launched in 2007, focuses on megatrends underpinning long-term growth, which include urbanisation, growing middle class, and connected cities.
JLL, a professional services firm specialising in investment management, has forecast that Asia Pacific real estate investment will continue to rebound in 2021, with direct transactions to rise by 15 to 20 per cent year-on-year, after declining 20 per cent last year.
Alternative asset classes like logistics, multi-family, and data centres are also likely to drive investment activity this year, it said. Besides, office, retail, and hotel investment deals are forecast to increase in tandem with economic growth.
Last week, global private equity firm Warburg Pincus filed with the US Securities and Exchange Commission to raise a $1.5-billion Asia real estate fund, its first vehicle with a dedicated focus on Asia’s burgeoning real estate market.
Early in January, US-based investment firm KKR & Co announced closing its first fund targeting real estate investments in Asia Pacific at $1.7 billion. The new fund would focus on Asia’s urbanisation trends, corporate carve-outs of non-core real estate assets in Japan, and also take-private opportunities in markets including Australia, Singapore, and Japan.
BlackRock Real Estate, the realty investment management arm of global investment manager BlackRock, also closed its fifth Asia-focused fund with capital commitments amounting to $1.175 billion early in March.