German insurer Gothaer has set up a fund to invest its balance-sheet capital in childcare property.
The first investments are scheduled for October with a target volume of €100m.
Gothaer said it was “an excellent opportunity for diversification with stable yields at low volatility of rent and capital value”.
The investments will also support the construction of new nursery facilities. Gothaer said there was a projected shortfall of 600,000 Kindergarten places until 2025.
In Germany, all children from the age of three have a right to a place in a Kindergarten before entering school, although it is not mandatory.
“This fund has a very low correlation to other asset classes,” said Markus Habbig, head of real estate at Gothaer Asset Management.
Gothaer Asset Management, which manages around €30bn for the Gothaer group and other third parties including pension funds, set up the Spezialfonds “solely for the group’s own books”.
Gothaer has €3.5bn of assets and 8.4% of this is in the form of real estate. “We want to increase that to 10% by 2020,” said Habbig.
Gothaer Asset Management is working with E&G Funds & Asset Management.
Gothaer is the latest in a growing number of European institutional investors to add “social infrastructure” to its portfolio.
Over the summer, Franklin Templeton issued a social infrastructure fund with social impact objective as well as financial return targets.
At the beginning of the year the High-Level Task Force of the European Long-Term Investors Association issued a report titled “Boosting Investment in Social Infrastructure in Europe”.