Barings has raised €850m for its second European value-add real estate fund.

The manager said the amount raised Barings Real Estate European Value-Add Fund II (BREEVA II) surpassed its initial €750m target to reach its hard cap. The fund was mainly backed by pension funds and insurance companies.

Barings said half of BREEVA II’s capital raised was from existing investors, with the remainder from new clients, and was well diversified across North America Europe and Asia Pacific.

The manager said the previous fund, BREEVA I, has already realised a number of assets and returned more than 60% of its equity to investors and achieved a blended gross internal rate on realisations in excess of 45%.

BREEVA II will continue the same investment strategy as BREEVA I, targeting value-add opportunities across Europe, with a focus on repositioning and build-to-core opportunities in the logistics, alternatives - living and office sectors.

Barings said it has already committed approximately 30% of the fund’s capital through eight transactions in the UK, Sweden, Germany and Italy and expects a number more to close in the coming weeks.

Paul Murphy, the head of client portfolio management for European real estate at Barings, said: “To have closed BREEVA II with such a high quality and well-diversified capital base is a strong endorsement in the strength of our strategy, investment track record and relationships with our clients.”

Murphy said there was over €1bn of client demand for BREEVA II and “we look forward to efficiently deploying the capital raised in the months ahead”.

Valeria Falcone, the head of value-add investing in Europe at Barings, said: “Through our strong network of local offices we have been able to not only continue our comprehensive value-add strategy throughout the pandemic but also identify and execute opportunities that have arisen as a result of it.

“This ongoing success, proven by the very strong returns delivered from BREEVA I, which has already returned 65% of the capital, has led to increased demand from investors and we have already identified a promising pipeline of further acquisitions following our initial commitments.”

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