GLOBAL - European institutional investors have committed close to €500m this year to US and Asian real estate through ING Real Estate's multi-manager investment business.
ING Real Estate Select attracted the capital predominately from Dutch investors in the first half of 2010.
Jan Meulenbelt, global head of ING Real Estate Select, said: "The high level of inflows over the last few months represents an endorsement of our policy to protect our investors by holding back capital from the market while real estate values were falling around the world in 2008 and 2009.
"We are now seeing strong interest from pension funds and insurers to re-enter the real estate sector, with the US and Asian markets as front runners at this point in the cycle, though the European markets will soon follow."
In terms of deploying capital to funds, ING Real Estate Select has been most active in the US this year, having placed approximately $200m (€155m) with fund managers.
The multi-manager said this reflected the opportunities investors were seeing in the market.
Kate Giordano, senior vice-president and investment manager at ING Real Estate Select in the US, said: "There were some timely investment opportunities we spotted and were able to take advantage of in the US since the start of 2010.
"Investors are overwhelmingly interested in funds targeting core assets, but we've also managed to secure value-added returns in the industrial and mixed office/retail sectors.
"I expect we'll have committed a further $100m by the end of the year."
In addition to pension funds and insurance companies, ING Real Estate Select said it had seen growing interest from balanced funds.
Meulenbelt said the company was looking for a mixture of safety, income and modest capital appreciation in its portfolios and tended to retain a relatively fixed allocation across investment asset classes.
The multi-manager business also said it continued to see a lower gearing among investors for leverage in funds.
Pieter Hendrikse, chief executive at ING REIM Europe and responsible for ING Real Estate Select, said: "In the wake of the economic crisis, there is clearly reduced appetite for risk, with both small and large institutional investors now preferring investments with low levels of leverage.
"There is also demand for true real estate fiduciary managers, who put their clients' interests first, managing portfolios by optimising risk versus returns and valuations relative to the cost of capital, while maintaining broad diversification in their investments."
