Gaw Capital buys Vietnam’s Indochina Land Holdings-2 fund at 58% discount

The Montgomerie Links & Estates- part of Vietnam’s Indochina Land Holdings-2 fund's portfolio (Visual from company's website)

Gaw Capital Partners (GCP), the Hong Kong based private equity firm that focuses on global real estate market, is learnt to have bought out investors in Vietnam’s Indochina Land Holdings-2 fund for a heavy discount.

Hanoi-based Indochina Capital, Vietnam’s first real estate fund, had closed the Indochina Land Holdings-2, in November of 2006 with a total of $265 million in capital commitments. This fund was committed to several to projects throughout Vietnam, including Indochina Plaza Hanoi, Hyatt Regency Danang Resort and Spa, The Montgomerie Links & Estates and Riverside Serviced Apartments. The Fund was unable to exit from most of these assets before its term expired.

An industry source familiar with the development said that the predominantly institutional investor base in Indochina Land Holdings 2 had opted to sell, rather than extend the tenure of the fund. It is believed that the investors in this fund had sold out for around $110 million – this translates to a discount of more than 58 per cent for GCP.

It is also learnt that Gaw Capital will move the assets that are currently under Indochina Land Holdings-2 to its Gaw-NP Capital Fund I.

Indochina Land had been managing three private, closed-ended funds with approximately $500 million of committed capital, that translated into approximately $2 billion of projects currently under management and development in Vietnam. All three real estate funds are private, close-ended investment vehicles focused primarily on Vietnam’s property market.

After the second fund, the Vietnamese PE firm had gone on to raise Indochina Land Holdings-3, which closed in October 2010 at $180.3 million in committed capital from institutional investors, 80 per cent of whom were investors within its previous fund vehicles. Indochina Land Holdings-3 is focussed on urban residential properties in the primary markets of Hanoi and Ho Chi Minh City, and its prominent projects include Central Park Hanoi (Pham Hung), Saigon South Residences, Indochina Villas Saigon and E-Home Binh Tan.

Indochina Land launched its first fund in 2005, with total commitments of $42 million from a mix of individual and institutional investors. Industry sources tracking the firm said that this fund, that was fully committed in nine investments located throughout Vietnam in the year of its launch itself, has been fully exited.

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