Germany’s biggest pension fund has hired USAA Real Estate Company to invest €750m in US residential markets.
USAA RealCo said the €80bn Bayerische Versorgungskammer (BVK) had launched an “evergreen separate account” to invest in multifamily assets.
Last year, IPE Real Estate reported on BVK’s plans to add award specialist real estate mandates in the Americas.
Norman Fackelmann, head of real estate investment management at BVK, said: “As a business, we are committed to growing our exposure to the US market and more specifically in the multifamily segment.
“We believe the multifamily sector offers strong risk-adjusted returns over the long term, and USAA RealCo’s performance has proven to be exemplary in this segment.”
He said USAA RealCo had consistently outperformed the NCREIF NPI Multifamily benchmark.
The mandate has been seeded with six recently-constructed, urban infill and transit-oriented properties, totalling 1,600 units and 36,000sqft of retail in five major markets.
USAA RealCo will in the future co-invest 10% in existing assets and 30% in ground-up developments.
The investment manager, part of insurance and financial servics group USAA said it will target “core, build-to-core and value-add acquisitions in premium, central neighborhoods within major markets across the US”.
It said: “The mandate’s goal is to create a portfolio of best-in-class multifamily assets that deliver strong cash-flow yield with significant appreciation potential, which also corresponds to BVK’s long-term perspective and objective”.
Frankfurt-based Universal-Investment will administer the mandate on behalf of BVK.