A newly launched Alpha Real Capital secure income fund has received an undisclosed amount of capital investment from Willis Towers Watson’s European Secure Income Fund (ESIF).
Alpha said it has launched the European Long Income Fund (ELIF) to target Euro-denominated, asset-backed, secure inflation-linked income streams by investing in commercial ground rents, amortising income strips and long lease property.
The fund’s primary focus on ground rents and income strips is intended to place ELIF at the lower end of the risk spectrum, offering a key differentiator to other long income property funds, the manager said.
The fund will concentrate on opportunities in the Eurozone with an initial focus on Germany, the Netherlands and Ireland.
The manager said it has secured a ”major investment” from the ESIF fund, with strong interest from European pension funds and insurers seeking secure long-term income to match their liabilities.
Willis Towers Watson launched the ESIF fund in February to help Euro-denominated pension funds access secure income assets and is available to investors in Europe and elsewhere.
At the time, the is ESIF fund had received £1bn (€1.2bn) of commitments in the UK.
Hugo James, partner and head of long income at Alpha Real Capital, said: “With nominal yields in northern Europe forecast to be close to zero or negative for the long term, we believe that secure income derived from long income property is an increasingly attractive asset class for European pension funds and insurers.”
James said the fund’s strategy is focused on commercial ground rents and amortising leases.
“We believe these structures can offer new and attractive funding solutions to owners and acquirers of operational real estate.
“Alpha continues to demonstrate an ability to directly originate and structure transactions that enable investors to deploy capital in a timely manner with a strong emphasis on risk management.”
Scott Gardner, partner investment capital, said: “Alpha has responded to increasing demand from European pension funds, insurance companies and their investment consultants to undertake a secure income strategy in Europe following our success in the UK.
“Our knowledge of what drives these investor segments along with our European presence and unique approach to origination makes us an attractive partner for large asset backed operating businesses. We expect to see considerable European growth in this strategy.”
