Cube Capital in three-country Asia fund

Cube Capital, the $1.3bn global alternatives investment firm, has launched the Cube Asia Frontier Fund (CAFF) to invest opportunistically in real estate in Myanmar, Mongolia and Vietnam.

CAFF will focus on these inefficient frontier markets where select opportunities for development and distressed investing are abundant and the economic environment provides a strong catalyst for growth, a statement said.

The closed end fund targets an investment period of 24-36 months and realisation period of 60 months after that, with a fund capacity of $150m. Cube anticipates extending CAFF’s activities to other frontier markets in the future, when it circumstances are advantageous.

CAFF was launched in anticipation of strong growth potential in the three markets, due to political changes, liberalisation, favourable regional demographics and lack of developed credit markets. The fund aims to provide investors with a diversified multi-country exposure while avoiding the traditional problems associated with single country frontier funds.

Cube’s team has worked with local partners in Asia sourcing, structuring and exiting real estate investments. Key to the risk management process of the fund is the alignment of interests with local partners through co-investment and the mitigation of market risk through the use of self-liquidating structures such as convertible debt and warrants.

Commenting on the fund launch, Thomas Holland, Chief Investment Officer of CAFF, said: “Our philosophy is to seek uncrowded investment opportunities, and we are confident that exploiting these still insufficiently explored markets will generate attractive returns. It will also make us one of the first entrants into nascent real estate investment markets such as Myanmar. We are looking forward to soon closing one of our first deals.”

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