Danish pension fund heavyweights ATP, PFA and Industriens Pension are joining forces to found a property fund with EjendomsSelskabet Norden, focusing on adding value to assets with an active management strategy.
The new fund, Norden VIII, will have a total investment capacity of DKK1.2bn (€161m), property fund manager EjendomsSelskabet Norden said.
Michael Nielsen, managing director at ATP Real Estate, said the fund would accept up to 50% leverage, and that the three pension funds were committing DKK600m of investment capital.
ATP has been working with EjendomsSelskabet Norden since 2005, and this is the third fund it has set up with the manager using more or less the same strategy, he said.
EjendomsSelskabet Norden said the new fund would focus on investing in properties in Copenhagen and its surroundings, where active management might increase the value of the assets.
Norden VIII will use the same strategy as previous Norden funds – buying residential and commercial properties that are empty or partly empty, or where the lease conditions fail to reflect the actual market situation.
Properties are then sold when it is most economically advantageous for the fund, the management firm said.
Peter Andreassen, managing director at EjendomsSelskabet Norden, said: “In the last few years, the rental market for offices has been difficult.
“But, with the expectation that this segment of the property market is also improving, now is seen as a good time to invest in property that is completely or partially empty.”
Nielsen said the strategy used by the manager gave ATP a type of property investment exposure in this geographical region it did not otherwise have.
“It is our way to have access to the development market in Denmark,” Nielsen said.
EjendomsSelskabet Norden said it now had five property funds with collective assets and untapped investment capacity of DKK7.5bn.
