NETHERLANDS - Dutch insurance firm ASR says the oversubscribed first closing of its Dutch prime retail fund will help it comply with Solvency II liquidity requirements and accelerate the development of its fund management business.
ASR will inject a €1.1bn, 210-asset portfolio into the fund, which raised €380m from European institutional investors against a target of €300m and has a target annual return of 7-9%.
Spokesman Daan Wentholt said selling a significant percentage of its holdings into the fund would allow ASR to adjust its exposure to real estate depending on the available risk budget under Solvency II.
“As with other assets, ASR can increase or decrease its stake in real estate with relative ease, depending on the risk profile,” he said.
“Using the real estate fund, ASR can increase or decrease the investment risk, depending on market conditions.”
The insurer is a cornerstone investor in the fund set up in July by its fund management subsidiary.
Asked whether dominance by one investor had been an obstacle to attracting others, Wentholt said governance structures set up by its fund management subsidiary had created a balance between ASR and other investors.
In any case, the insurer said it planned to reduce its share to 20%, he said.
The insurer attributed the success of the fundraising to the quality of the portfolio, which includes an additional €300m asset pipeline, the fact that it is a core fund with low leverage, and easily traded units “by Dutch standards”.
The seed portfolio for the fund comprises high street units, shopping centres and supermarkets representing around a quarter of the insurer’s real estate holdings.
ASR plans to plough more of its exclusively domestic portfolio - including office, residential and agricultural assets - into new funds as part of a strategy to develop its real estate investment management business.