Asian Firm Seeks $1 Billion Fund

Asian Firm Seeks $1 Billion Fund

Commercial News » Asia Pacific Commercial News Edition | By Francys Vallecillo | November 18, 2013 9:23 AM ET

Asia private equity firm RRJ Capital is seeking a potential $1 billion real estate fund, with a focus on China investments. 

The new fund for the Asian investment firm is initially looking to raise $500 million to invest in residential, retail, hospitality and elderly care homes, Richard Ong, the firm's founder, told Reuters. 

With an expected close in the first quarter of next year, the fund will target a 25 to 30 percent return on investments. 

"We are very bullish on China's economy and expect stable, good growth," Mr. Ong told Reuters. "Depending on demand, we may expand the fund to up to $1 billion."

The fund will avoid prime office space investments due to the market's competitiveness and lower yields, Reuters reports. 

Global private equity firms have increased their Chinese real estate investments this year. Earlier this month, private equity giant Blackstone Group paid $400 million for a 40 percent stake in Chinese mall developer and operator SCP Company Ltd. 

Private equity investments in China's real estate sector increased 53 percent to about $1.2 billion by early November, according to Reuters data.

RRJ Capital focuses on private equity investments in China and South-East Asia. The firm was founded in March 2011 and closed its first fund in June 2011 with a fund size of $2.3 billion, according to the firm.

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