Arch holds second close on property fund at $307 million

Arch Capital has held a second close on its pan-Asian property fund at $307 million, with a final close date postponed to the first quarter next year due to challenging fundraising conditions in Europe.

Arch Capital - TRG Asian Partners LP launched in May and held its first close at $220 million in June. A final close at $500 million – initially slated for the year end – has been delayed, following the onset of the sovereign debt crisis this summer.  

“The newly admitted investors in our second closing did not come from Europe,” says Leonard Wei, Arch’s chief operating officer. “There is no question that the developments in the [European Union] have affected everybody.”

Investors in the second close include the pension fund “of a large, very well respected US banking organisation”, and a Middle Eastern investor, says Wei. About 50% of the limited partners in Arch’s maiden fund – the $330 million Arch Capital Asian Partners, which closed in 2007 – are re-investing with the firm through its new vehicle.

The new fund has already made investments, but Wei declined to provide details, apart from to say: “We have a full pipeline [of deals] and, time-permitting, we hope to have additions to the fund portfolio imminently.”

Arch Capital - TRG Asian Partners LP invests in residential, mixed-use, retail and commercial property, with a primary focus on Greater China, where it can invest up to 60% of capital. 

Singapore and the Philippines will also feature prominently, with maximum investment limits set at 20% and 10%, respectively. The fund will also seek opportunities in Thailand and consider deals in Indonesia, Malaysia and Vietnam.

This is Arch's first product launch since US hedge fund The Rohatyn Group (TRG) took a 50% stake in the firm in March.