UNITED STATES – European pension funds were key investors in the initial fund-raising period for AMB Europe Fund I commingled fund, according to AMB executives.
John Roberts, president of AMB Capital Partners, said around 95% of the capital raised for the pooled fund came from European investors, including some of Europe’s largest pension funds and insurance companies.
Among the assets were contributions from fund of funds managers, foundations and endowments, said Roberts, and just 5% of the capital came from the United States.
That said, Roberts was not surprised by the makeup of the investor group.
"We had intended from the beginning to make the initial raise mostly funded by European investors," he said.
"It was our opinion that there was a demand for industrial properties by this investor group and it allows us to diversify our source of capital for our commingled funds."
A total of 20 institutional investors signed up to invest in the AMB Europe Fund I, contributing a total of $350m (€263m) to the fund which has a projected gross IRR returns of 11%-13% over a typical holding period of three years.
While $350m was raised at the initial stage, total capitalization of the fund is expected to be in the region of $1.1bn, as this includes a 20% co-investment from AMB and a targeted leverage ratio of 60% of the aggregate gross value of the fund’s assets.
The open-ended Europe fund will be used to acquire mostly stabilized industrial properties, such as distribution facilities near high-volume airports, seaports and highway systems. This will include assets developed by AMB, while around 20% of the deals could involve development or redevelopment opportunities.
Early investments will be made in Western Europe, more notably Paris, Amsterdam, Frankfurt, Hamburg and Rotterdam while investments will be sought in central and Eastern Europe at a later date.
AMB’s goal is to invest €400-500m on an annual basis but keep expanding its potential, according to Roberts.
"Our long-term goal is to have total assets in the fund around €2bn in the next three years," he added.