Warburg Pincus closes US$2.8b inaugural Asia real estate fund

[HONG KONG] US private equity powerhouse Warburg Pincus has closed its inaugural Asia-focused real estate fund at US$2.8 billion, the firm said on Wednesday (Dec 22).

The Warburg Pincus Asia Real Estate Fund is the second-largest fund dedicated to the sector in Asia, according to data provider Preqin. Blackstone Group raised US$7.1 billion in the region's largest real estate fund in 2018, the data showed.

The fund will focus on investing in asset-level, technology-enabled or technology-driven real estate opportunities in Asia, Warburg said in a news release.

"We are currently witnessing a once-in-a-generation change in real estate driven by technology, where leading global investors are seeking to rebalance their portfolios by investing more capital into new economy real estate where they have been meaningfully underweight," said Jeffrey Perlman, the firm's managing director and head of Asia-Pacific real estate and Southeast Asia.

The fund will focus on areas such as logistics, data centres, IT offices, life science parks, and multifamily real estate, according to the release.

It will also invest in the repositioning of underperforming or obsolete real estate assets and those in special situations, the firm said.

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Warburg's real estate fundraising comes as an increasing number of global private equity managers seek to diversify in Asia.

US-based KKR & Co in January closed its first real estate fund at US$1.7 billion.

Blackstone is aiming to raise US$9 billion in its third and largest Asia real estate fund, the firm's chief operating officer said in October.

Fund managers have raised a total of US$17.1 billion in 37 real estate funds for Asia so far this year, Preqin data showed.

Warburg's inaugural Asia real estate fund exceeded its initial target of US$1.5 billion and hard cap of US$2.5 billion because of strong demand, the firm said. More than 60 per cent of the capital raised was from leading institutional investors in Asia, it said.

The firm has been in Asia real estate sector for more than 15 years through its main global funds and China- and Southeast Asia-focused companion funds, with over US$6.5 billion invested in more than 40 real estate ventures.

REUTERS