Aberdeen Asset Management Asia has launched a property fund of funds aimed at institutional investors seeking to gain exposure to real estate in the Asia-Pacific region that could raise up to $400 million.
Aberdeen , best known in Asia for its equity funds, has been building up its offerings in other asset classes. It launched two bond funds that will invest in Asian and emerging market debt in April, and set up a $400 million joint venture with GE Capital Real Estate in May that will invest in residential property in Tokyo.
“Having built a substantial specialist equity and now a growing fixed income business over the past 20 years, property stands as the next asset class that is ripe for expansion,” Aberdeen Asia Managing Director Hugh Young said in a statement.
For its latest property fund of funds, Aberdeen is targeting 13-17 percent annual returns with gearing of 50-60 percent. Aberdeen’s existing Asian property funds last year returned 13.3 percent to 25.7 percent, it said.
Aberdeen expects to raise $300-400 million.
Puay Ju Kang, Aberdeen’s head of property for Asia Pacific, said the UK fund manager expects to allocate most of the money to private equity fund managers that concentrate on single countries or a specific sector.
“We tend to prefer managers who are very focused with a very specific skill set,” said Puay, who joined Aberdeen Asia in September 2006 when the firm launched its first property fund of funds.
She had previously worked for Dutch pension fund APG and the real estate arm of the Government of Singapore Investment Corp.
Puay said Aberdeen, which manages or advises on about $1 billion in Asian real estate investments, has to date allocated funds to managers that invest in Japan, Singapore, China, India and Australia.
Besides offices, malls and residences, Aberdeen has also put money in a fund that has invested in Japanese nursing homes.
The Asian property arm’s main client base for property investments comprises European institutional investors that were keen on Asian real estate but lacked a direct presence in the region, she added.
Aberdeen Asia, which is headquartered in Singapore, is one of the largest investors in the Asia-Pacific region with about $95 billion. At the group level, the firm manages or advises on $290 billion in assets.