AXA Investment Managers-Real Assets has raised €500m for a pan-European, open-ended real estate fund.
The AXA CoRE Europe fund, with an initial €700m investment capacity, will focus on core European real estate assets.
A mix of new and existing institutional clients from Europe and Asia made commitments to the fund.
The investment manager said the fund had an ultimate €3bn-5bn target size.
Isabelle Scemama, head of funds, told IPE Real Estate the fund would focus on office, retail and logistics assets in the UK, Germany and France.
The vehicle will also target properties in Spain, the Benelux countries, the Nordics and Switzerland.
“We are looking at cities and not countries,” she said. “Paris and London – despite nervousness over Brexit – are typical investment locations for the fund.
“If an asset is in the right location in London, for example – it will go through the cycle.”
The fund, Scemama said, will also invest in Madrid and Barcelona offices, as well as German and Nordic cities, while being selective in Amsterdam.
Scemama said the investment manager recently looked at a retail opportunity in Germany.
The fund, she said, could invest in high street assets or “well-performing” shopping centres, with room to invest in logistics.
The fund is part of a club of investors, along with France’s Assurances du Crédit Mutuel, which bought France’s tallest office tower, Tour First, from Beacon Capital Partners.
The 80,000sqm asset, 83% let, changed hands in January this year.
Scemama said the asset – the French headquarters of accountancy firm EY – was a typical example of the kind of properties the fund would target.
“It’s well located – we know the building very well from the past,” she said.
“It was too big for the fund alone, but we are comfortable about being in a joint venture as a way of getting access to larger assets.
“Size is needed if you are going to offer diversification for clients. It’s critical to be large at the beginning.”
Scemama said it was a condition for the fund that it would have sufficient size.
“A lot of medium-sized institutions do not have the capacity to invest themselves,” she said. “It’s a way of starting their allocations.”
The company said the fund, which will be managed by Rainer Suter, head of Continental funds and separate accounts, will also consider investments where it can enhance returns by improving occupancy levels.
As reported yesterday, the investment manager has recruited Ruulke Bagijn, CIO for private markets at PGGM.
Bagijn will join in May and take up the role of global head of real assets private equity in Paris.