Shenzhen PE firm reaches first close on debut property fund
PTiFund, a Shenzhen-based private equity firm backed by Hong Kong-listed property developer Top Spring International Holdings, has announced a first close of RMB125 million ($19.6 million) on its debut fund. The full target is RMB500 million.
The fund, which is being pitched to high net worth individuals, will invest in residential property projects in Shenzhen, Reuters reported.
Payne Fung, the firm's chief investment officer, said that they hope to reach a final close in mid-December. PTiFund has two more vehicles in the pipeline and is looking to raise RMB1.5 billion in total. The second fund, also targeting RMB500 million, is scheduled to launch later this month. The second and third funds will raise money for mixed-use developments near Guangzhou and in the Yangtze River Delta, respectively.
China's property sector has become a focal point for private equity investors seeking to leverage long-term growth prospects as well as those targeting special situations opportunities arising from a tighter bank lending policies.
Last week, CITIC Capital held a first close on its fourth Chinese real estate vehicle, CITIC Capital China Retail Properties Investment Fund, at $225 million. The fund, which will invest in the retail sector in second- and third-tier Chinese cities, has a target of $600 million. In September, KKR launched a $140 million Chinese real estate fund with property firm Sino-Ocean Holdings, which will invest in mid-to-high-end residential properties in emerging cities for a period of five years.
On the special situations front, property is regarded as one of a range of opportunities, ranging from underfinanced infrastructure projects to capital-starved small- and medium-sized enterprises. Speaking to AVCJ in August, Benjamin Fanger, founder and chairman of Shoreline Capital Management, said he expected to see "tremendous opportunities" not only in property segment, but also in energy, among other sectors.
In October, PAG closed its first regional special situations fund at $900 million while Clearwater Capital Partners has raised $200 million for its fourth Asia ex-Japan fund, which also has a target of $900 million.
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