The two companies unite to launch a real estate private credit fund.
Hong Kong-based Oi Wah Pawnshop Credit Holdings Limited (HKEx stock code: 1319.HK) and PACM Group (Holdings) Limited have recently signed a memorandum of understanding (MOU) to collaborate on the development of an international real estate private credit institutional investment management business and the establishment of an investment fund of up to US$300 million.
The fund will employ diverse investment strategies, encompassing asset-backed direct lending, non-performing debt acquisition, acquisition financing, stretch senior financing, project financing, bridge financing and other debt-related approaches. This collaboration aims to leverage the expertise of both companies and explore opportunities in the real estate credit market.
In this strategic collaboration, Oi Wah and PACM Group will embark on a series of international investor roadshows, commencing with Taiwan as their initial destination. These roadshows serve as a platform for introducing the investment strategy and distinctive features of the fund to prospective investors, with the aim of attracting a greater number of participants.
According to the MOU, the potential cooperation involves jointly establishing a limited partnership fund. Oi Wah will act as the cornerstone investor, providing initial capital, while a jointly established company will serve as the general partner of the fund. The specific details of this cooperation model will be defined in a formal agreement between both parties.
Highlighting the significance of the collaboration, the Chairman and CEO of Oi Wah, Edward Chan, stated, “With the global economy on the rise, the real estate private credit investment sector is rapidly expanding. Our partnership with PACM Group will allow us to unlock the vast potential of this market and strengthen our international competitiveness. Together, we are embarking on an exciting new chapter in the global market, focused on achieving mutual growth.”
In elaborating on the decision to start the roadshows in Taiwan, Chan emphasized the country’s status as an economically advanced region with a favorable investment climate and a diverse investor community. He highlighted the stability of Taiwan’s financial market and regulatory framework. The objective of conducting roadshows in Taiwan is to attract a greater number of Taiwanese investors by offering them a well-structured alternative investment solution that effectively manages risks in the region. The selection of Taiwan as the starting point reflects the companies’ confidence in the market’s potential and the desire to tap into its robust investment landscape.
Managing Director and Chief Investment Officer of PACM Group, Francis Ng, expressed his enthusiasm about the collaboration and stated that this marks the second fund initiated by PACM Group. With the expertise of both parties in the private credit fund and lending industries, they believe the fund will effectively seize market recovery opportunities and offer investors a well-managed product with appropriate risk adjustment.
The collaboration’s goal is to achieve double-digit returns through investments in private debt instruments backed by real estate assets in developed markets. Notably, Taiwanese investors have demonstrated interest in fixed-income commodities and real estate markets, and the initial conversations with them have yielded positive responses.
Oi Wah, the first pawn shop listed on the Main Board of The Stock Exchange of Hong Kong Limited, brings nearly 50 years of industry experience and is a market leader in providing pawn loans and mortgage-secured loans. Teaming up with PACM Group, a reputable real estate private credit investment management firm with international expertise, Oi Wah aims to consolidate the market and establish leadership in the real estate private credit investment sector.
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