UK - CB Richard Ellis Investors has launched its first property fund aimed at the defined contribution (DC) pension sector.
The CB Richard Ellis UK Property Fund, which will invest directly in the UK real estate market, will enable the firm to manage DC pension assets for the first time.
The fund management arm of CBRE has managed funds on behalf of defined benefit (DB) pension schemes for over 30 years, but is now targeting the UK's DC sector.
CBRE Investors has been working closely with platform providers and investment consultants in setting up the fund.
The growing volume of DC pension capital in the UK - which one day might outgrow DB assets - might prompt more real estate specialist fund managers to target the sector in the future.
‘‘We believe that our experience will allow us to capitalise on a growing and developing market," said Nick Preston, senior director at CBRE Investors.
CBRE investors claims its new fund represents the first opportunity for DC pension investors in the UK to access a fund run by a purely property specialist investment manager.
The firm will maintain its house investment approach of focusing on retail and industrial assets with a higher-than-average yielding portfolio.
In the long run, CBRE Investors will aim to build a diversified UK property portfolio worth £1bn (€1.1bn), with a view to generating long-term sustainable returns.
The fund has been structured as a property authorised investment fund (PAIF), the recently approved new tax structure for UK real estate investments.
The fund, which was given approval by the UK's Financial Services Authority on 25 February, follows soon after the very first PAIF, launched by Clavis Walden, earlier this year.
"We have worked closely with our team of advisers to develop this pioneering fund structure involving a PAIF with an authorised feeder fund," Preston said.
"We believe that our fund is the first product of its kind available in the UK market and look forward to developing this side of our business," he added.