Gaw Capital sets sights on US$1b overseas purchases

Private equity firm Gaw Capital Partners is poised to take minority stakes in four commercial property acquisitions in the United States and Britain in ventures with mainland Chinese and Asian partners, involving a gross value of US$1 billion.

The deals will follow the real estate fund's tie-up with South Korean institutional investors to acquire Waterside House, a London commercial building which houses the global headquarters of retailer Marks & Spencer, for US$321 million.

"In the next three months, we will sign two deals in the US and two in Britain," said managing director and principal Goodwin Gaw. Gaw Capital will take a minority stake in each project.

A partner in one of the deals was a mainland state-owned enterprise, Gaw said. He expects more Chinese institutional investors to follow its lead.

"We received cold calls from Chinese institutional investors after we helped Ping An Insurance arrange the Lloyd's Building deal in London," Gaw said.

In July, Ping An paid £260 million (HK$3.3 billion) for the building, making it the first direct overseas property acquisition by a mainland insurer. Gaw Capital advised on the deal.

"Chinese investors are cash-rich. This is just the beginning," Gaw said.

Gaw Capital has been helping its Asian clients buy properties abroad since 2010, when it set up an operation separate from its fund management business. "We can offer the service as we understand both mainland and overseas markets," said Gaw, who has been investing in US properties since 1995.

To date, the company has helped clients with seven investments totalling US$1.8 billion. It has taken minority stakes in all the deals except the Lloyd's Building purchase.

"We know what clients want. We found the deals and asked them to invest. We manage the properties for them," Gaw said.

Of the seven properties Gaw Capital has invested in, one was sold after making a good profit.

But fund management remained the company's major business, Gaw said. Since 2005, Gaw Capital has raised more than US$3.57 billion and now has assets under management totalling US$7.47 billion, encompassing residential, retail, hotel and commercial properties.

It recently closed subscriptions for its fourth China real estate fund after they totalled US$1 billion. About 40 per cent of the fund has been invested and acquisitions include the Metropolitan Plaza in Guangzhou, which was bought from Hutchison Whampoa at a reported price of 2.5 billion yuan (HK$3.2 billion).

In the US, the firm is raising a second fund targeting investments of US$500 million.