Warburg Pincus has closed its Asia real estate fund at $2.8 billion. Warburg Pincus Asia Real Estate Fund will invest in real estate assets in Asia with a focus on “new economy” real estate. The fund will also invest in underperforming or obsolete real estate assets as well as those in special situations. The fund’s limited partners include public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, and high-net-worth individuals.
SINGAPORE AND HONG KONG – December 22, 2021 – Warburg Pincus, a leading global private equity firm focused on growth investing, today announced it has successfully raised Warburg Pincus Asia Real Estate Fund, L.P. (“Warburg Pincus Asia Real Estate Fund” or “the Fund”). The Fund was closed with a committed capital of $2.8 billion, making it one of the largest ever first-time dedicated real estate funds globally and the 2nd largest active opportunistic real estate fund in Asia.
The Fund will be a standalone fund, focusing on investing in asset-level real estate opportunities in Asia. 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. 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 over 15 years through its main global funds and China-SEA-focused companion funds. It is one of the largest and most active investors in Asia real estate, with over $6.5 billion invested in more than 40 real estate ventures including some leading platforms which Warburg Pincus co-founded alongside best-in-class entrepreneurs such as ESR, Vincom Retail, PDG, DNE, and BW Industrial.
Jeffrey Perlman, Managing Director and Head of Asia-Pacific Real Estate and Southeast Asia at Warburg Pincus, commented, “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.”
Warburg Pincus Asia Real Estate Fund was launched in November 2020, initially targeting a fund size of $1.5 billion. 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 fundraise and completed a final close at $2.8 billion. Over 60% of the capital raised was from leading institutional investors in Asia.
Commenting on the strong demand from the investors, Perlman said,“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.”
Technology disruption has been a core foundation for Warburg Pincus’ real estate investment strategy. Over a decade ago, the firm 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. Identifying this trend early, the firm began 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 region, 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 best-in-class New Economy infrastructure developer and operator in China.
Ellen Ng, Managing Director and Head of China Real Estate at Warburg Pincus, commented, “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.”
Warburg Pincus is committed to responsible investing that encourages environmental sustainability, social responsibility, and effective corporate governance (“ESG”), with a belief that an effective ESG program will enable the firm and its portfolio companies to better manage risk, improve efficiency, reduce costs, maintain strong stakeholder relations, and build more valuable, competitive, and sustainable entities. Several real estate investments such as ESR and ARA, have successfully developed robust ESG programs. Building on this experience, Warburg Pincus has developed internal and external ESG resources, which will assist the firm in evaluating potential ESG risks and opportunities in future real estate investments.
The limited partners 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.
About Warburg Pincus
Warburg Pincus LLC is a leading global growth investor. The firm has more than $67 billion in private equity assets under management. The firm’s active portfolio of more than 215 companies is highly diversified by stage, sector, and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 20 private equity funds, which have invested more than $97 billion in over 960 companies in more than 40 countries. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore. For more information please visit www.warburgpincus.com.