(Yicai) May 21 -- CapitaLand Investment, the real asset manager of Singapore's CapitaLand Group, has launched its first onshore master fund in China with an equity commitment of CNY5 billion (USD694 million), marking a major step in deepening its investment in the world’s second-largest economy.

CLI has teamed up with a major Chinese insurance company, which will take a majority stake in the CLI RMB Master Fund, to pursue its asset-light strategy, the Singapore-based firm said today. The master fund is expected to contribute CNY20 billion (USD2.8 billion) to CLI’s funds under management 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, CLI said. The sub-funds will invest in business parks, retail properties, rental housing and serviced residences across China’s first-tier and leading second-tier cities. Future sub-funds may also invest in special opportunities in other sectors such as data centers, logistics parks, and offices, it added.

“Leveraging our over 30 years of experience in China and deep on-the-ground expertise, our first master fund in China demonstrates CLI’s capabilities in structuring and launching a diversified suite of Chinese yuan-denominated funds tailored to domestic investors’ needs,” said Puah Tze Shyang, chief executive of CLI China.

“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,” Puah said.

“With this new fund, we have successfully raised CNY54 billion (USD7.5 billion) across seven yuan-denominated funds since 2021, demonstrating the strong momentum of our domestic-for-domestic fund strategy to grow our funds under management and recurring fee income,” he added.

CLI China has a well-diversified portfolio of more than 300 properties across over 40 cities, including offices, shops, lodgings, business parks, logistics and data centers. It also applied to Chinese regulators last month to launch a real estate investment trust based on its commercial complexes, which would make it the country’s first foreign issuer of a retail REIT.

Editor: Kim Taylor