BNP Paribas Real Estate Investment Management has launched a European fund that will seek to reduce greenhouse-gas emissions in line with the 2015 Paris Agreement.
The open-ended European Impact Property Fund has raised €160m in a first close from investors, including a European insurer – which committed €100m – and an unnamed French institutional investor.
BNP Paribas REIM is aiming for it to be the first fund compliant with the 2015 Paris Agreement, targeting a 40% reduction greenhouse-gas emissions within 10 years across its portfolio.
The fund will focus on reducing emissions in existing buildings, where the biggest impact can be made.
BNP Paribas REIM has developed an action plan and a climate-reporting system to quantify the fund’s positive impact on assets and to measure the success of emission reductions.
The Luxembourg-domiciled fund is structured as a core European diversified open-ended fund and BNP Paribas REIM hopes to reach a gross asset value of more than €1bn over the next two years.
Its objective is to generate recurring and stable income returns with an annual net distribution of approximately and loan-to-value ratio of 25%.
Laurent Ternisien, chief client officer at BNP Paribas REIM said the fund “offers a very innovative real estate investment solution to investors seeking stable income return whilst looking to participate in the climate transition, which is becoming increasingly important in the allocations of institutional investors”.
Nathalie Charles, deputy CEO of BNP Paribas Real Estate and global head of investment management, said the objective of the fund was “to go one step beyond established practices with a climate-impact-investing approach applied to European properties. BNP Paribas REIM is committed to being a frontrunner in ESG strategy”.