PAG, the Hong Kong-based private equity firm, has managed to raise $1.3 billion for its new real estate fund, higher than its original target of $1 billion. The fundraising process has now ended.
The firm manages $16 billion in investments. It raised the capital from institutional investors like German insurer Allianz and PGGM, the Dutch pension fund manager. PAG has contributed about $20 million from its own resources.
A company spokesperson said in an email to DEALSTREETASIA that the fund would be part of PAG Real Estate, run by Jon-Paul Toppino.
PAG makes loans to developers that need capital to complete projects, refinance other debt or buy new land.
With this fund, PAG is focussing on deals in Japan, China, Australia, South Korea and Hong Kong, locations where PAG has prior experience in, according to Pere News. About half of the fund has already been invested.
“Our focus remains to ensure we continue to drive and maximise investment performance and maintain best-in-class fiduciary standards,” said Broderick Storie, a partner at PAG.
Among PAG’s first deals in the new fund is the purchase of several assets from GE Japan Corp., which was exiting the property market, following its US-based parent’s decision to exit that asset class.
The fund is expected to remain invested in assets for about seven years, and have a total life of 10 years.
The firm, run by former TPG executive Shan Weijian, had raised $3.66 billion for its second Asian buyout fund in January. The company had closed its first fund at $2.5 billion in 2011, and this vehicle has returned $1.5 billion to investors, with a gross internal rate of return of around 30 per cent.
PAG, formerly known as Pacific Alliance Group, currently has more than $15 billion in funds under management, and has dedicated funds and teams focused on each strategy. Since 2002, PAG — whose other arms include PAG Real Estate and PAG Absolute Returns — said it had invested $28 billion in markets across Asia.
The company employs over 300 executives, across China, Japan, Singapore, Australia, South Korea and India.