Mapletree Investments - New Kid on The Block

Mapletree Investments (a Temasek subsidiary) has launched a new fund called Mapletree India-China Fund (MIC). Asian Investor has an article about the fund and its tie-up with HSBC Private Bank for distribution. Salient points are below

• MIC is a dual-country, total return fund that aims to capitalise on the growth potential within India and China by developing office, retail and residential real estate within these two markets. Its assets now stand at $1 billion and it has a targeted maximum fund size of about $2 billion. After leverage at the project level, the size of the fund will be $4 billion.The target annual returns for the fund are 20%. Drawdown and investment period is expected to be completed within three years and with a typical lifespan of around five years per investment. There is no liquidity for the fund, and the tenor is approximately eight years
• HSBC Private Bank has been given the exclusive distribution rights for high-net-worth investors via a feeder fund named the HSBC Emerging Growth Real Estate Fund. Ordinarily, tickets of $50 million have to be written in order to invest in this Mapletree fund, but for HSBC private clients, they can come in for $250,000.
• The fund has already made three investments - all of which are in China. Investments have been in a mixed-use development (retail + service apartments), an office block and an integrated retail & residential development

The logistics segment in India is ripe for institutional investing and we have seen some signs of it already (Eg. Old Lane's investment in Sical Infra Assets). With real estate majors looking at logistics in a big way, it is a matter of time before more investors put their money in this space. Given Mapletree's history and investments outside of the MIC fund, as also the real estate investment landscape in India, I would expect them to focus their investments towards industrial/logistics facilities and away from the traditional retail/residential segment.