Ohio Bureau of Workers Compensation Board (BWC) is investing $50m in Gaw Capital Partners’ third US value-add fund, which is expected to close in the current quarter.
As previously reported by IPE Real Assets, Hong Kong-based Gaw Capital is seeking to raise $400m in total this year.
In November, Gaw held the first close for its US Value Add Fund III with total commitments of $250m.
Ohio BWC said in its board meeting report that the $400m capital raise for Gaw third US value-add fund is expected to be completed during the first quarter of this year.
The fund will invest in US office and hotel assets.
The amount being raised will be Gaw’s largest fundraising in the US. Gaw US Fund I in 2012 received $110m in capital and Gaw US Fund II in 2014 raised $314m.
Ohio BWC said Gaw’s first fund has sold nine of its 12 properties and produced a 35% gross internal rate of return and the second fund has sold three of its 13 properties to yield a 23% gross retrun.
Ohio BWC previously approved a $50m commitment into Gaw US Fund II. The net internal rate of return on this investment has been 12.91% as at June last year.
Gaw is investing at least $12m of its own capital into Fund III. The targeted returns for this fund are a net internal rate of return of 12%.
The leverage limit on the fund is 65% of aggregate investment fair market value.
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