Germany’s nuclear waste management fund Kenfo has shifted its focus to pan-European real estate as market activity in Germany has stalled.
Etienne Naujok, senior real estate investment manager at KENFO, told IPE Real Assets that the €25bn pension fund is pursuing a globally diversified approach with a clear focus on Europe, assessing potential target markets based on macroeconomic data, demand and trends, financing and capital costs, and market liquidity.
The German real estate market is showing limited transaction activity and pricing uncertainty, and therefore KENFO is monitoring developments very closely for now, Naujok said.
Germany remains a “fundamentally attractive market” and “one in which we plan to invest in the future”, he added.
KENFO’s targets a 5% allocation to illiquid real estate, representing a portion of the approximately 30% currently allocated to private markets.
The German nuclear waste management fund currently faces a €1bn shortfall in its €1.3bn illiquid real estate allocation.
Naujok said KENFO slowed its lliquid real estate investment pace due to the high valuations present when the fund first began building its portfolio, resulting in the shortfall.
“Market developments since 2020 have confirmed our decision [to slow down investments],” Naujok added.
KENFO will continue to invest where it sees compelling opportunities and risks relative to the overall portfolio – in Germany and worldwide.
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