The Real Estate Behind The World's Largest Sovereign Wealth Funds: The Hong Kong Monetary Authority
The Hong Kong Monetary Authority manages one of the largest sovereign wealth funds in the world. Known as the Exchange Fund, it manages over $456B in assets and focuses on steadying the exchange value of the Hong Kong dollar.
While the majority of the fund is allocated in currencies, the HKMA has been moving deeper into real estate in recent years in the search for long-term growth. At the end of 2015, the Exchange Fund held over $6.5B in real estate. Here are some of its largest purchases.
An HKMA subsidiary bought a 49% stake in NYC's 1095 Sixth Avenue for $1.15B in August 2016. Real Summit Investment purchased the stake from Ivanhoé Cambridge and Callahan Capital Partners, marking one of HKMA's largest real estate investments. Salesforce.com anchors the 41-story tower.
In 2014, HKMA grabbed a 47.5% stake in LA's Century Plaza Hotel for $786M, according to CBRE. Built in 1966, the landmark hotel has a long history and was nearly demolished in 2008. It was saved a year later when it was added to the National Trust for Historic Preservation's list. It is closed for $2.5B of renovations that will transform the property and add two 46-story towers just behind the hotel.
HKMA made its first big move into Paris in 2012 when it bought the 52 Hoche and Avant Seine office buildings. Eurosic sold the properties for $540M, and JP Morgan Asset Management advised HKMA during the deal.
Not to ignore London, HKMA bought a 50% stake in the city's Hanover Square Estate through a joint venture with the seller, Great Portland, for $325M. The development will include 208k SF of stores, offices and six apartments, and experts said the completed development will be worth around $764M.
