Italian institutions commit to European blind pool fund

EUROPE - AXA Real Estate Investment Managers has raised €118m from Italian institutional investors for a blind pool fund targeting European office markets.

The Caesar Fund will target core properties in the euro-zone and UK on behalf of a mixture of Italian social security entities, pension funds and insurance companies, including AXA Group companies.

AXA Real Estate has a final capital raising target of €200m and will begin the fund’s investment programme by deploying capital in the UK and France.

The fund’s manager Giorgio Pieralli said: “To have raised as much as €118 million at the first close of a blind pool fund is extremely rare in the current market and is indicative of our ability to attract capital in all market conditions.”

The fund launch is notable not only for successfully raising capital for a blind pool strategy but also because Italian institutional investors often have limited exposure to non-domestic real estate markets.

The Caesar Fund is the second regulated vehicle managed by the AXA Real Estate’s business in Italy, the first being the Core Italian Properties Fund (CIPF), which was restricted to the Italian property market. CIPF is fully invested in the Italian office, retail and logistics markets.

The new fund will have a similar core risk profile to its predecessor but it will aim to take advantage of supply-demand in markets outside Italy.

“We will begin by investing in the UK and French office markets as we believe these currently offer the best opportunities to meet our clients’ requirements by investing in assets with highly stable long term income streams,” Pieralli said.

“These markets are also attractive as they now have the most acute supply-demand imbalances of all Europe’s main cities. As other markets start to recover, we expect to broaden the fund’s investment horizons across Europe, leveraging our pan-European network of local experts.”
 
The Caesar Fund has a nine-year life and seeks to achieve an average annual dividend of 5.5%]on invested capital and an internal rate of return of 9%.