EUROPE - AXA REIM plans to grow its alternative assets under management from €740m to €1.5bn by 2015 to meet demand from investors for high-income returns.
The property asset manager said it would "formalise" its 10-year-old alternatives business - which comprises assets including student accommodation, elderly care homes and a Swedish police station - in a new platform targeting third-party mandates and additional funds.
Fund manager Dan Bowden, who will manage the significantly boosted platform, said it would allow AXA REIM to exploit pricing arbitrages that exist in these sectors throughout Europe, as well as increase its capability to go after off-market deals.
Bowden said growing interest from institutional clients in assets characterised by indexed-linked, government-backed assets, typically with 25-year leases, had driven the platform's development.
He cited an increase in transaction volumes from €1.3m in 2007 to €2.6m last year.
"In particular, we are received a lot of interest from investors who have been seeking the potentially high income returns, capital resilience, diversification benefits and the ability to enter socially responsible investments, which are characteristics available in the sector," he said in written responses to questions.
Although there will be no significant change for existing investors in the launch of a new platform, Bowden said it would enable AXA REIM to open up alternatives to a wider pool of investors via a single entry point.
The fund manager also plans to launch a blind-pool successor to the APIV fund Bowden already manages. Few details of the new fund were available this week.