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GLP establishes $1.6 billion China logistics fund

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GLP, a private equity-owned warehouse operator based in Singapore, has launched a RMB10 billion ($1.6 billion) PE fund that will invest in the China logistics ecosystem. It is the second Chinese fund set up by the company this year.

The vehicle, called Hidden Hill, is supported by a number of institutional investors and insurance companies including China Post Capital. It will be managed by GLP's Chinese private equity unit known as Hidden Hill Capital.

In February, GLP established an RMB10 billion fund known as China Value-Add Venture I, with China Life Insurance as the sole LP. Both vehicles are part of the company's broader strategy of moving mature assets from its balance sheet into fund structures and using the proceeds to support new developments.

"The launch of Hidden Hill is a major milestone for GLP," Ming Mei, co-founder and CEO of GLP, said in a statement. "The fund will invest in adjacent growth sectors that complement GLP's real estate business, with a focus on companies employing technology to enhance efficiency in the logistics industry.

China Life holds a stake in GLP's China business, having participated in a private equity-led consortium that invested $2.5 billion in 2014 for a 30% interest. The consortium also took a minority stake in GLP itself. In January, GLP was delisted from the Singapore Exchange following a S$15.9 billion ($11.5 billion) acquisition that included Hillhouse Capital and Hopu Investment, among others.

GLP manages more than $50 billion of assets globally across real estate and private equity platforms that have recycled more than $8 billion of assets in the past six years. China is the firm's largest market, with 30 million sqm of modern logistics facilities occupied by the likes of Best Inc, LF Logistics, BMW, and JD.com.

Revenue increased 13% during the 2017 financial year to $879.6 million, with the company citing a record level of rental income, a strong performance in Chinese financial services related to equipment leasing, and a 21% year-on-year lift in fund management fees to $181 million. Profit for the year improved marginally to about $1 billion.

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