Keppel Capital’s Alpha Asia Macro Trends Fund IV (AAMTF IV) value-add property fund has raised US$295m (€249m), including co-investment, at its first close.

The fund, launched through Alpha Investment Partners, Keppel’s private fund management arm, has a target fund size of US$1bn. The predecessor fund raised U$1.1bn in January last year.

The AAMTF IV fund is expected to manage assets under management of up to US$2.5bn when fully leveraged and invested.

AAMTF IV will invest across key gateway cities in the Asia-Pacific region, including Singapore, Beijing, Shanghai, Tokyo, Seoul, Hong Kong, Sydney, Melbourne and Brisbane. Asset classes targetted are offices, business parks, logistic facilities, retail and accommodation.

Alvin Mah, CEO of Alpha, told IPE Real Assets that the majority of the raising came from Alpha’s existing investor base of insurance, endowment and pension funds.

Despite the COVID-19 pandemic, Mah said key gateway cities in the Asia-Pacific region continued to be “very relevant” to the fund’s investment strategy of focussing on major macro trends, such as urbanisation, growing middle class and connected cities.

“In current market conditions, we are monitoring developments for potential dislocations where stress is being observed. These create opportunities for investments with good growth potential,” he said.

“We are seeing interesting opportunities, for example, to acquire hotels at distressed pricing to repurpose for alternative uses at below replacement cost,” he said.

“In China, restrictions on developers’ leverage have created opportunities to acquire good quality assets at attractive price points, with vendors placing greater emphasis on certainty of closing as opposed to negotiating for best pricing.”

Asked about average returns delivered by predecessor funds, Mah said: “In general, the expected gross internal rate of returns from investments in the AAMTF series are in the mid-teens for value-add funds.” The AAMTF series was launched in 2007.

Since 2004, Alpha has executed more than 180 transactions, with gross acquisition value of more than US$24bn for its managed funds across the strategy spectrum – from core, core-plus and value-add to opportunistic.

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