Hong Kong-based real estate investment firm Gaw Capital has taken a step toward offering everyday investors a slice of the private lending market. The company filed draft documents for a new listed fund, the Gaw Capital Real Estate Private Debt OFC, which would focus on making property-backed loans across Asia Pacific and the Middle East.
According to the filing, the fund is designed to keep at least 90% of its assets in property-related debt. That includes loans secured against buildings, development projects, and other real estate assets. The remaining portion could be held in cash or other liquid instruments to manage day-to-day operations.
What is an OFC and why does it matter?
OFC stands for Open-ended Fund Company, a structure commonly used in Hong Kong for investment funds. Unlike a traditional private fund, which is typically available only to institutional investors or wealthy individuals, an OFC can be listed on a stock exchange. That means smaller, everyday investors could buy into the fund the same way they would buy shares of a company.
This is a notable shift. Private credit—lending that happens outside traditional banks—has historically been the domain of large pension funds, endowments, and ultra-high-net-worth individuals. By packaging it into a listed vehicle, Gaw Capital is trying to open the door to a broader audience.
The move also reflects a broader trend in the investment world. Private credit has grown rapidly in recent years as banks have pulled back from certain types of lending, particularly in real estate and development. Funds that can step in to fill that gap have attracted significant attention from investors seeking higher yields than traditional bonds or savings accounts.
Gaw Capital's track record and scale
Gaw Capital is a well-known name in Asian real estate. The firm said in its draft filing that it managed $35.6 billion in assets as of December 31, 2025. That scale gives it experience in sourcing and managing property deals across multiple markets.
The new fund will target opportunities not just in Asia Pacific but also in the Middle East, regions where real estate development and financing needs are often acute. By lending against physical assets, the fund aims to generate income from interest payments, which are typically higher than what investors can earn from government bonds or high-grade corporate debt.
However, property lending carries its own risks. If a borrower defaults, the fund may need to seize and sell the underlying property, which can take time and may not recover the full loan amount. Economic downturns or falling property values can amplify those risks.
What it means for investors
For everyday investors, the appeal of a listed private debt fund is the potential for steady, higher-than-average income. But it's important to understand what you're buying. Unlike a simple stock or bond, this fund's performance will depend on the health of real estate markets across a wide geographic area.
Investors should also be aware of liquidity. While the fund will be listed, meaning you can buy and sell shares on an exchange, the underlying assets are private loans that are not easily traded. In times of market stress, the fund's share price could diverge from the value of its assets, and redemption requests might be limited.
The filing is still in draft form, meaning the fund is not yet available to investors. Gaw Capital will need regulatory approval before it can launch. If approved, it would join a growing list of listed private credit vehicles, though most of those have focused on corporate loans rather than real estate.
For context, other firms have also been exploring ways to bring private credit to public markets. For example, Blue Owl's private credit redemption requests eased in the third quarter, a sign that investor demand for such products remains robust. Similarly, Axis Capital's growth story goes beyond premium hikes, according to UBS, highlighting the broader appetite for alternative income sources.
Gaw Capital's move also comes at a time when global interest rates are elevated, which has made borrowing more expensive and increased the appeal of lending. However, higher rates also mean that borrowers face greater pressure, which could lead to more defaults.
Risks to watch
Real estate debt funds are not without their pitfalls. The property market in Asia Pacific has been uneven, with some regions experiencing oversupply and others facing cooling demand. The Middle East, while buoyed by high energy prices, has its own set of geopolitical and economic uncertainties.
Investors should also consider the fund's fee structure, which is not detailed in the brief but is typically higher for private credit strategies than for passive index funds. Those fees can eat into returns over time.
Finally, it's worth noting that the fund's focus on private debt means it will be lending to borrowers that may not have access to traditional bank financing. That can be a double-edged sword: it allows the fund to charge higher interest rates, but it also means the borrowers are riskier.
As with any investment, it's wise to read the full prospectus once it becomes available and consider how this fits into your overall portfolio. For those who are comfortable with the risks, a listed real estate debt fund could offer a way to diversify beyond stocks and bonds. But it's not a guaranteed income stream, and the value of your investment can go down as well as up.
Gaw Capital's filing is a reminder that the line between public and private markets is blurring. As more firms seek to package private assets into exchange-traded vehicles, everyday investors will have more choices—but also more homework.
