- Warburg Pincus recently announced it has successfully raised Warburg Pincus Asia Real Estate Fund, L.P. These are the details.
Warburg Pincus – a leading global private equity firm focused on growth investing – recently announced it has successfully raised Warburg Pincus Asia Real Estate Fund, L.P. The Fund was closed with committed capital of $2.8 billion, making it one of the largest ever first-time dedicated real estate funds globally and the second-largest active opportunistic real estate fund in Asia.
This fund will be a standalone fund, focusing on investing in asset-level real estate opportunities in Asia. And in partnership with experienced real estate developers, operators, and entrepreneurs, the fund will be used to buy and develop real estate assets in Asia with a focus on New Economy real estate including logistics, data centers, IT office, life science parks, and multifamily real estate. Plus the fund will also invest in the repositioning of underperforming or obsolete real estate assets as well as those in special situations.
Warburg Pincus has been investing in Asia real estate companies and platforms for more than 15 years through its main global funds and China-SEA-focused companion funds. And it is one of the largest and most active investors in Asia real estate with over $6.5 billion invested in over 40 real estate ventures including some leading platforms — which Warburg Pincus co-founded alongside entrepreneurs like ESR, Vincom Retail, PDG, DNE, and BW Industrial.
The Warburg Pincus Asia Real Estate Fund was launched in November 2020, initially targeting a fund size of $1.5 billion. And due to the strong demand from the limited partners, the fund received commitments in excess of the $2.5 billion hard cap set during the fundraising and completed a final close at $2.8 billion. More than 60% of the capital raised was from leading institutional investors in Asia.
Over a decade ago, Warburg Pincus identified the transformational impact from technology as a key factor that would impact many types of real estate. The rapid expansion of e-commerce, the accelerating digital transformation, and the fast development of technology companies continue to give rise to the strong demand for logistics, data centers, IT offices, and life science parks. By identifying this trend early, the firm started building its exposure in logistics and IT office parks over 10 years ago and had sold all of its retail and commercial assets in China by 2015.
Starting with the co-founding of ESR in 2011 — which has grown to become the largest logistics real estate player in the area — Warburg Pincus increased the exposure of its New Economy real estate investments to over 2/3 of its real estate portfolio, including its co-founded platforms such as PDG (a leading pan-Asian data center provider) and DNE (a New Economy infrastructure developer and operator in China).
The LPs that have committed to the Warburg Pincus Asia Real Estate Fund include existing investors in Warburg Pincus’ funds and new investors to the firm, including leading public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, and high-net-worth individuals.
KEY QUOTES:
“We are deeply grateful for the trust and support of our limited partners. This inaugural fund marks a major milestone for our Asia real estate business and further reinforces our position as the ‘partner of choice’ for real estate developers and operators in the region. As we start to deploy the capital at scale, we look forward to leveraging the firm’s deep experience, strong record and robust ecosystem across the region.”
“We are currently witnessing a once-in-a-generation change in real estate driven by technology where leading global investors are seeking to rebalance their portfolios by investing more capital into New Economy real estate where they have been meaningfully underweight. As a thought leader in New Economy real estate in Asia, Warburg Pincus is well-positioned to help investors tap into the firm’s expertise to gain this critical exposure going forward.”
— Jeffrey Perlman, Managing Director and Head of Asia-Pacific Real Estate and Southeast Asia at Warburg Pincus
“As a firm we have always been very thesis-driven, which allows us to identify fast-growing sectors early on and ahead of capital flows. Our ability to leverage insights of other sector groups in our private equity franchise has been a key differentiator as most deals now cross geographies and sectors. Our understanding of where technology and healthcare are headed and impacting the use of real estate has anchored our investments to date and will continue to help us identify new angles to increase exposure in the New Economy asset classes.”
— Ellen Ng, Managing Director and Head of China Real Estate at Warburg Pincus
