AIP Secondary Fund I collected $400 million against an undisclosed target, according to a Wednesday statement. AIP gathered an additional $200 million of managed accounts available for co-investments.
It will back LP- and GP-led real estate secondaries transactions across the Asia-Pacific region.
Singapore-headquartered AIP was founded in 2021 by managing partners Bastian Wolff, who spent 15 years at Partners Group, including most recently as head of Asia private real estate; and Christian Keiber, whose previous role was managing director in Blackstone’s Southeast Asia and Australia private equity team.
“Chris and I set up Aquilius mainly due to the fact of there’s been an unprecedented growth in the private markets in Asia-Pacific; Asia has actually outpaced growth in the US and Europe,” Wolff said.
“There’s been a lack of dedicated secondary capital in this region… and then pair that with a high complexity and [the] disintermediated nature of the market, we realised that for investment managers that can really invest in the resources and roll up their sleeves, there is actually a real opportunity here in Asia-Pacific secondaries.”
The firm raised capital from a mix of global LPs, including sovereign wealth funds, endowments and family offices, the statement said. “[Given] the fact that we are an Asian manager, I think there’s also a natural tendency to have a larger component of an Asian LP base,” Wolff noted.
Aquilius did not disclose how long Fund I had been in market, though Keiber noted the process was “fairly quick”.
“I think the attractiveness of giving institutional LPs access to… the Asian real estate market in a very diversified way – so not having them to bet on a particular country, on a particular asset class, on a particular core or non-core strategy – was quite a unique offering,” he added.
APAC asset activity – defined as any LP selling APAC positions, or an APAC GP-led – reached $6 billion in 2022, down from $7 billion in 2021, according to a report from Greenhill. Real estate secondaries transaction volumes reached an all-time high of $12.4 billion in 2022 – the third record-breaking year in a row. Last year, US-weighted partnerships represented 54 percent of real estate secondaries trading, with European and Asian partnerships accounting for 40 percent and 3 percent, respectively, according to data from Ares Management.
“There’s a countercyclical element to [secondaries],” Keiber said. “So if you look at what happens globally, in times of economic uncertainty, there’s a natural tendency by LPs to gravitate back to their home markets. That drives a lot of transaction volume for us… and not only does it drive a lot of transaction volume, but is also a good recipe for really attractive pricing.”
Asia-Pacific private markets have been impacted recently by diminished LP appetites for China, in part due to geopolitical tensions and uncertainty around the country’s property market. “Over the last two years, there has been a very pronounced shift in sentiment towards China,” Alfredo Lobo, a Hong Kong-based partner at capital advisory firm Hodes Weill & Associates, told affiliate title PERE this year, noting a growing number of US and European investors now want little or no exposure to the country.
“We take a very sober view to China – obviously from a secondaries perspective, there [are] a lot of people that are reallocating away from it,” Wolff said.
“There is dealflow there that we find interesting – and I think we’re not sort of pessimistic about that part of the market – but I think we very carefully analyse which sector we’re investing in; which market; which cities we invest in… and we take a view of where cap rates might be, where occupancy is. On an asset-by-asset basis, we underwrite these assets.”