Singapore-based Alpha Investment Partners (AIP) is set to launch two real estate funds with a combined capital raising target of more than $1.5bn (€1.38bn).
AIP will begin marketing its third Alpha Asia Macro Trends Fund (AAMTF) and launch a new unlisted data centre fund in the first quarter of the year.
AIP’s managing director Christina Tan told IPE Real Estate: “Quite a number of our existing investors have been asking if we were planning to start a new fund.
“We are in a good position because of our past track record and our reputation in the market.”
AIP hopes to raise more than $1bn for AAMTF III, with the first closing in the first half of this year and final closing expected a year after that.
The market expects AAMTF III to be significantly oversubscribed, given the strong demand evident for its AAMTF II, which raised $1.65bn by the time it reached a final close in 2013.
“We will invest the funds raised over a three-year period in key gateway cities of the Asia Pacific,” Tan said, including Shanghai, Beijing, Tokyo, Seoul, Singapore, Taiwan and Hong Kong.
AAMTF III will be the first in the series to invest in Australia, where it will focus mainly on Sydney and Melbourne.
Asked about the timing of the launch, Tan said: “The current environment offers good opportunities where we could value add, especially in markets where we see certain price dislocations.
“We will look to acquire assets with the best risk-adjusted returns by participating at different stages of the property life cycle from development, standing investment and re-positioning plays.”
Tan hopes the fund’s US dollar denomination will enable it to take advantage of weaker currencies in some of its target markets.
The Alpha Asia Macro Trends series, first launched in 2007, is designed to capitalise on long-term macroeconomic and social trends in Asia Pacific, including urbanisation, consumerism, tourism and ageing populations.
AIP is now increasing its focus on the rise of e-commerce, cloud computing and the demand for internet security and plans to raise $500m for a data centre fund.
Young Lok Kuan, executive director of portfolio management, said data creation and storage needs have been growing at 48% a year – in line with an explosion in the use of mobile phones, plus other developments such as government regulation of internet security and cloud computing.
“Regulators now require institutions, especially financial institutions, to ensure that information is backed up in data centres.
“We are all contributing to the demand for data storage when we send pictures to our friends or chat on social media platforms – everything on our phones and other hand-held devices are stored in the cloud,” Tan says.
AIP’s data centre fund is probably among the first few unlisted funds of its kind in Asia, although its parent group Keppel floated the Keppel DC REIT on the Singapore Exchange in 2014.
It was reported at the time that institutional investors’ indications of interest for the placement tranche amounted to SGD4.7bn (€3.05bn), representing 24.4 times over-subscription.
Tan said the listed vehicle, which owns nine data centres around the world, including in Europe, Asia and Australia, has performed well since listing.
A Keppel subsidiary, Keppel Data Centre Holdings, will develop and operate the assets of the unlisted data centre fund.
“Keppel has an established track record in managing data centres,” Tan said. “It has been in this business for more than a decade.”
Tan said that assets could be sold to Keppel DC REIT once they are established and start to generate strong incomes.
Data Centres is a specialised asset class and the DC REIT could be a natural buyer and off taker for the stabilised data centres.
AIP is being brought under Keppel Capital Holdings, as part of Keppel Corporation’s move to consolidate and grow its SGD26bn asset management platform.
Keppel Capital Holdings has oversight over AIP, manager of Keppel Infrastructure Trust, Keppel DC REIT and listed Keppel REIT.
Tan has been appointed CEO-designate of Keppel Capital Holdings.