Merrill Lynch & Co. announced Tuesday it has raised US$2.65 billion to invest in Asian real estate, betting that cooling property markets will rebound despite slowing regional economies and global financial turmoil.

The fund will focus primarily on Japan, China, South Korea and India, with Australia and Southeast Asia of secondary consideration, the U.S. bank said in a statement.

It represents Merrill's first fund dedicated to real estate investment in Asia.

"We see exceptional opportunities in Asian real estate over the medium and longer term," said Tim Grady, a managing director who heads commercial real estate in Asia.

Investors include pension funds, endowments, foundations and private individuals from around the world, the company said.
The Asian Real Estate Opportunity Fund will invest directly in real estate assets and real estate companies, among other investments. The company did not release additional details.

Merrill was taken over by Bank of America last month as the financial crisis caused a seismic shift on Wall Street.