NETHERLANDS - Mn Services is in discussions with 25 global real estate fund managers, on behalf of Pensioenfonds Metaal en Techniek (PMT) and Pensioenfonds van de Metalektro (PME), about an extension to fund investment periods.
Between them, the two Dutch pension funds have commitments with approximately 100 real estate funds in Europe, the US and Asia. A quarter of these are now having to justify why they need to extend investment periods which are due to expire.
"It totals some hundred different partnerships, of which for 25 we are in discussions over the existing investment period," said Richard van Ovost, head of international property at Mn Services.
The fiduciary manager has not made any new commitments to real estate funds on behalf of its two largest pension fund clients for the past two years because existing managers - predominantly opportunistic in style - have been slower than expected when it came to calling on and investing capital during the market turmoil.
Mn Services hopes to conclude investment period extensions by the summer. But van Ovost said he has concerns about funds where key senior people have left - sometimes reappearing at other funds - and about managers who are looking to deviate from their original fund strategy.
Van Ovost argued managers need to concentrate on adding value to existing assets and cited recent work by LaSalle Investment Management, to bring in new tenants, as a good example.
The fund manager secured a new 12-year lease for Le Viala, a 12,349 square metre office block in Paris owned by the LaSalle French Fund II, in which Mn Services has invested client money.
Recent press reports suggested PMT was looking to change its strategic weighting within its real estate portfolio in favour of emerging markets over developed markets, but van Ovost has no plans to do so.
The pension fund had been intending to gain exposure to South American and Indian real estate markets, but was put on hold prior to the onset of the credit crunch in 2007.
Van Ovost plans to discuss with a number of global real estate managers, such as Aberdeen Property Investors, Henderson Global Investors and Pramerica Real Estate Investors, the prospect of investing in emerging markets real estate in South America, China and India, so their clients are in a position to respond quickly when the time is right.