CapitaLand Investment Limited (CLI) announced on May 21 it has established its first onshore master fund in China, CLI RMB Master Fund, with a total equity commitment of RMB5 billion ($921 million). CLI has secured a major domestic insurance company to take up a majority stake in the master fund in line with its asset-light strategy to grow its funds under management (FUM). The master fund is expected to contribute RMB20 billion to CLI’s FUM when fully deployed.

The master fund will invest in a series of sub-funds that will seek to acquire high-quality, income-producing assets with long-term growth potential. The sub-funds will invest in business parks, retail, rental housing and serviced residences across Tier one and top Tier two cities. Future sub-funds may also invest in special opportunities in other sectors such as data centres, logistics parks and offices.

Puah Tze Shyang, Chief Executive Officer of CLI China, says that CLI has over three decades of deep on-the-ground expertise in China.

"Our first master fund in China demonstrates CLI’s capabilities in structuring and launching a diversified suite of RMB funds tailored to domestic investors’ needs. This allows us to tap into a rising trend of insurance companies increasing their capital allocation to real estate in China, providing them opportunities to invest in a diversified and resilient portfolio of stabilised assets with core returns," says Puah.

"With a major domestic insurance company as a co-investor in the master fund, we are well-placed to attract other insurance firms to invest in the sub-funds and rapidly expand our domestic investor base. With this new fund, we have successfully raised RMB54 billion across seven RMB funds since 2021, demonstrating the strong momentum of our domestic-for-domestic fund strategy to grow FUM and recurring fee income," adds Puah.

In April, CLI announced it has applied to list its first real estate investment trust in China, to be named CapitaLand Commercial C-REIT (CLCR). CLCR will broaden CLI’s access to domestic capital and further grow its recurring fee income.

CapitaMall Yuhuating owned by CapitaLand China Trustand CapitaMall Sky+ owned by CLI and CapitaLand Development will be the two seed assets for CLCR.