Global real asset manager CapitaLand Investment Limited (CLI) has launched its first onshore master fund in China, backed by a total equity commitment of 5 billion yuan ($692.5 million).
The Singapore-based company said its new fund, CLI RMB Master Fund, will target business parks, retail, rental housing, and serviced residences across tier-one and top tier-two cities in China.
The master fund will invest in a series of sub-funds that seek to acquire “high-quality, income-producing assets with long-term growth potential.” Future sub-funds may also explore special opportunities in other sectors such as data centres, logistics parks, and offices, CLI announced on Wednesday.
This investment strategy “aligns closely with China’s national priorities” as the country transitions into “a consumption- and innovation-driven economy,” said Kara Wang, Chief Investment Officer of CLI China.
With this new fund, CLI has raised 54 billion yuan ($7.5 billion) across seven RMB funds in China since 2021 under a domestic-for-domestic fund strategy. It now operates a portfolio of over 300 properties across over 40 cities in the country.
When fully deployed, the fund is expected to contribute 20 billion yuan ($2.8 billion) to CLI’s funds under management (FUM), which stood at S$117 billion ($90.6 billion) as of March 31.
In line with its asset-light strategy to grow its FUM, CLI has secured a major domestic insurance company in China to take up a majority stake in the master fund.
The launch of its first onshore master fund “demonstrates CLI’s capabilities in structuring and launching a diversified suite of RMB funds tailored to domestic investors’ needs,” said Puah Tze Shyang, CEO of CLI China.
“This allows us to tap into a rising trend of insurance companies increasing their capital allocation to real estate in China, providing them [with] opportunities to invest in a diversified and resilient portfolio of stabilised assets with core returns,” he said. “With a major domestic insurance company as a co-investor in the master fund, we are well-placed to attract other insurance firms to invest in the sub-funds and rapidly expand our domestic investor base.”
Globally, the investment management arm of Asian real estate giant CapitaLand Group held stakes in seven listed real estate investment trusts and business trusts, as well as a suite of private real asset vehicles by the end of Q1.
Its diversified real asset classes cover retail, offices, lodging, industrial, logistics, business parks, wellness, self-storage, data centres, private credit, and special opportunities.
