Bayerische Versorgungskammer (BVK) has become the first third-party investor to join Allianz Real Estate’s €3bn Luxembourg-based European debt platform.
The €81.7bn German pension fund has committed €300m, giving it a 25% stake in a €1.2bn sub-fund, the rest of which will be owned by Allianz insurance companies.
Allianz Real Estate, which manages €8.7bn in European property debt, established the Luxembourg ‘umbrella fund’ in 2018 to open its strategy to third-party investors.
Reinhold Weger, head of fixed income at BVK, said it “represents an excellent opportunity to expand our exposure to quality assets through a co-investment structure”.
Last year, BVK became Allianz Real Estate’s first third-party investor, co-investing 50% in the acquisition of the EDGE East Side Berlin office development. Both investments by BVK mark Allianz Real Estate’s first moves into third-party fund management.
Last year, CEO François Trausch told IPE Real Assets that the company hoped to reach €100bn in assets under management by 2024, of which 10% would be managed for external clients. Since then, Allianz has announced that it will merge Allianz Real Estate with its third-party fixed income fund management business PIMCO.
Allianz said it expects BVK’s latest commitment “to accelerate demand from other large institutional clients, such as insurers and pension funds, to co-invest alongside Allianz in new sub-funds”.
Allianz Real Estate has continued to be active as a lender in recent weeks, despite widespread disruption caused by the COVID-19 pandemic. In April, it financed GLL Real Estate Partners’ acquisition of the Bishop’s Square office building in Dublin.
Roland Fuchs, head of European real estate financing at Allianz Real Estate, told IPE Real Assets: “We are seeing opportunities back again in the prime loan sector.”
Fuchs said opportunities were emerging to finance acquisitions and provide refinancing with lower risk profiles and higher-return potential than was possible prior to the pandemic.
Weger said: “While the wider market has been disrupted by the COVID-19 pandemic, our perspective has always been on the long term, which we view as a core strength of the Allianz proposition.”
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