EUROPE - AXA Real Estate has raised the acquisition target for its €7bn debt platform this year from €2bn to €2.4bn after spending €1.3bn on assets during the first half.

They include the acquisition, confirmed this week, of an €800m Societe Generale portfolio understood to be secured against French and German assets.

The fund manager also announced that it had secured €1.4bn in investor commitments in the first half of the year against a full-year target of €2bn, citing stronger-than-expected demand from European pension funds and insurers for an alternative to fixed income.

It included the acquisition, confirmed earlier this week, of an €800m Société Générale portfolio secured against French and German assets.

Although UK and French institutional investors have made up the majority of investors in the fund manager's debt platform since it launched in 2005, AXA has seen strong recent appetite among investors in Germany, the Netherlands, the Nordics and Switzerland.

It attributed the increase to appetite for diversification outside their domestic markets and away from fixed income.

Isabelle Scemama, AXA REIM SGP head of CRE finance, said: "When you look at the balance sheets of these investors, you find 80% allocated to fixed income. Given an environment where interest rates are low, the alternatives are corporate bonds, which are intermediated by banks and are relatively volatile, and real estate loans that used to be owned by banks."

Acquisitions in the primary market will make up the bulk of AXA's debt investments over the next six months, after a period of significant activity in the secondary market.

Of the first-half loans the fund manager announced this week, 60% closed in the secondary market.

"Some banks are facing less pressure to sell because quantitative easing has given them a breath of fresh air," Scemama said.

"But banks with assets to sell want counterparties with the scale to execute big transactions.

"Increased investment capacity allows you to drive the terms and conditions on larger deals. That's a strong element for our clients.

"It means you can be selective in mixing assets depending on the risk/return profile. It isn't just about risk, but about our ability to drive the market."

AXA has one portfolio acquisition - described by Scemama as "significant" - in the pipeline, although she declined to give details.

However, she did not rule out the acquisition of sizeable portfolios in the secondary market.

"We're expecting a big refinancing trend and more opportunities in the primary market, but we'll go where we're able to get the best return," she said.