GERMANY – Mid-sized and large institutions will continue to invest in funds – but they will target niche vehicles and depositories for their directly held portfolios, German real estate asset management firm Union Investment said this week as it announced capital commitments of €1.5bn for 2012.
The Hamburg-based manager attributed the year-on-year 50% increase in capital raised to a combined strategy of launching new products and addressing the investment needs of specific groups of investors, notably churches, foundations and cooperative banks.
Otherwise, separate mandates last year accounted for a significant proportion of capital commitments – €850m of some €960m.
A spokesman for the fund manager said the firm had seen a shift towards investor-specific options and – especially from large investors – interest in portfolio deals.
Larger institutions also inclined to move directly held portfolios into funds with expert management, he said.
But he denied that there was a reluctance to invest in pooled vehicles, except among larger institutions.
Pointing to the success of the UniInstitutional German Real Estate fund, which attracted capital from 250 institutional investors despite uncertainty over the future of open-ended funds created by the debate over AIFMD, he said: "Pooled solutions are of interest as long as investors trust in the fund sponsor offering them."
The spokesman said he expected more interest from smaller investors in the fund – one of two new open-ended real estate funds that raised €620m last year – and more demand for niche products from large and mid-sized investors.
Pension funds and insurers currently make up 35% of the fund manager's investor base, though they accounted for most of its equity commitments over the past two years, and the fund manager expects the proportion to increase to around 50% in the short term.
In separate news, Union Investment denied its decision to sell five real estate assets in Santiago reflected negatively on the Chilean market.
Describing the move as "completely independent" of its positive view of the market, the spokesman said the sale to a local firm represented a market opportunity to create value for investors in its UniImmo: Global fund.