Denmark's PFA backs new Morgan Stanley Asia core fund

Denmark’s largest commercial pensions company PFA is investing in a new Asia-Pacific core fund being launched by Morgan Stanley Real Estate Investing.

Industry sources believe Morgan Stanley is close to completing an initial capital raising of $450m to $500m.

PFA is to become the cornerstone investor in the open-ended fund with a $200m commitment. 

Michael Bruhn, managing director of PFA’s real estate arm, said there was a compelling case for investing in Asian real estate, despite recent macro-economic concerns.

“This is a very long-term strategy targeting stable assets,” he said. “We are positive towards Asia in general and have invested there in the past.”

South Korea, Japan and Australia currently look like attractive markets to invest in, he added.

Bruhn said that the geared fund should be able to return “at least 8%” to PFA, which made the decison to back Morgan Stanley late last year.

A number of investment managers are seeking to launch Asian core-plus funds. Asian real estate funds are increasingly moving from opportunistic to core and value-added strategies, according to analysis by CBRE last year.

Savills Investment Management is planning to launch a fund this year, as reported earlier this month.

The new billion-dollar vehicle, to be known as Savills IM Asia Fund 3, will be the successor to Savills Asia Fund II, a €200m closed-ended fund that was launched before Savills IM’s takeover of SEB.