GERMANY - Four German pension funds have commissioned Warburg-Henderson to set up a €300m pan-European property Spezialfonds.
According to Warburg-Henderson, four municipal pension funds - two long-term clients of the property company and two new clients - have joined forces to set up an institutional real estate fund.
Eitel Coridaß, managing director at Warburg-Henderson, said: "The investors share a lot of common interests regarding their investment."
He said the structure of the vehicle made it similar to a fund for a single investor, being able to meet investor needs flexibly and individually, as well as take into account existing real estate investments in the portfolio. In a Spezialfonds, investors have a say in the asset allocation of the fund and can jointly agree on changes to the portfolio.
According to Coridaß, this model of a 'KOOP-Fonds' is a new trend, and Warburg-Henderson is already preparing a similar fund for several German insurers.
"Large pooling funds are here to stay, but more and more institutional investors are looking for fund solutions in which they can consistently pursue their investment strategies sharing common investment interests with the other fund participants," he said.
The risk-averse fund will be investing office and retail properties in Western Europe, aiming for an internal rate of return of 6.5% a year and focusing on continuity of returns.
HIH Hamburgische Immobilien Handlung will manage the German part of the portfolio exclusively for Warburg-Henderson, while Henderson Global Investors will take on the other European property holdings.
Warburg-Henderson said the first property for the fund was already in the purchasing phase.
The real estate company founded in 2001 as a joint venture between the German private bank MM Warburg & Co and the UK asset manager Henderson Global Investors is currently managing assets worth around €3.7bn.