Alpha Investment Partners raises $1.6 billion for a new fund focussed on Asian real estate

Singapore's third-largest developer, Keppel Land's property management unit, Alpha Investment Partners Ltd (AIP), recently raised $1.6 billion for a new fund that will focus on real estate in Asia. The amount is not only $300 million more than its own target, it is also the largest ever raised by AIP since its inception in 2003.

The funds were raised from 15 institutional investors, including European pension funds and banks as well as sovereign wealth funds. With this new addition, AIP will now have $5.2 billion of assets under management. The success of this fund raising shows the confidence that investors have in AIP's management which is in line with their performance in other funds.

AIP raised $243 million, in 2003, for Asia No. 1 Property Fund with a target of 20% IRR. As of March 2008 they had returned 27% and have begun to return capital to the investors. Alpha Core Plus Real Estate Fund was set up in 2004 with $435 million and a target IRR of 12% -13%. The achieved return was an annualised 40 per cent as at March 2008.

The latest fund, Alpha Asia Macro Trends Fund, has a targeted return of 16 % to 18%. They are looking to invest in real estate in Singapore, Japan, Taiwan, South Korea and Hong Kong, and the emerging markets of China, India and Vietnam.

We had commented earlier that funds flush with money are looking to Asian real estate for investment as the western markets continue to remain in flux. This new fund is testament that there is still appetite amongst blue-chip investors to back funds with strong track records.