GERMANY - Asset manager Union Investment has said it is aiming to increase the institutional share in its real estate business with themed funds and asset pooling vehicles.
Since June 2011, Union has collected €1bn in assets from institutional investors through a number of vehicles including one €350m individual mandate from an unnamed German Versorgungswerk in December.
Christoph Schumacher, member of the board at Hamburg-based Union Investment Institutional Property, said: "We want to continue to make use of the increased demand by institutional investors in themed know-how in real estate management to strengthen our position in the market, especially with regards to individual solutions for pension funds and insurers."
Currently, Union manages around €3.2bn in institutional money in real estate vehicles.
In other news, residential property specialist Patrizia has reported an increase in sales in 2011, with 1,842 flats having been sold over the last year to private and institutional investors, compared with 1,803 in the previous year.
Of those, the majority (1,097) was sold in bulk to institutional investors and the rest to individual buyers.
Patrizia noted that, with these successful sales, it could confirm its €16m-17m forecast for 2011 results.
Heightened institutional interest was also noted by Henderson Global Investors in its Henderson German Retail Income fund (HGRIF), which has now closed at €350m, €50m above its initial target volume.
Fund manager Thilo Wagner said the strong support of German insurers, pension funds and Pensionskassen was an indication of the increased interest in retail property as a means of further diversifying institutional portfolios.
German real estate funds of funds, however, did not fare so well in 2011.
Three funds were liquidated last year: the DJE Real Estate, the Premium Management Immobilien-Anlagen and the DB Immoflex.
Peter Hahn, a German lawyer specialising in real estate, criticised funds of funds' "faulty design".
He also claimed that investors had been "lured in" by promises of greater diversification and higher returns.
Respecting the DJE Real Estate fund, set up in 2004, Hahn pointed out that the fund had shrunk to €185m in volume down from €651m two years ago.
He also argued that that many of the open real estate funds in which the DJE fund of funds had invested had themselves been liquidated.
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