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Money continues to flow into Asia Pacific property markets, which are recovering quicker than other regions, many analysts believe.
This week Apollo Management, the giant New York-based private equity firm, announced plans to launch a $500 million to $1 billion fund targeting distressed property. The fund will be based in Hong Kong and headed by Grant Kelley, who was chief executive officer of Colony Capital Asia until a year ago, the Financial Times reports.
The fund will attempt to buy property “at a fraction of face value by acquiring large positions in the debt of over-leveraged property companies,” the FT reports.
While many investors are targeting the rollercoasters of Hong Kong and China, Kelly expects to focus on Japan, Korea and Australia, more “subdued” markets, the paper reports. Kelley sees “opportunities” in acquiring distressed real estate investment trusts, with creditors to buy up individual properties on the cheap and buying up non-performing loans.
Eventually the fund plans to develop its own investment trusts in markets like China and India.
The fund represents the first venture into Asia Pacific real estate for Apollo, which is currently managing more than $38 billion in assets. However, in recent months the firm has launched a variety of real estate funds targeting different aspects of the real estate financial markets.
