Omega Immobilien is to launch its first alternative real estate fund and create a new KVG, or asset management firm.

The German manager said it would raise €100m for the Omega Immobilienfonds Rheinland I fund, adding 50% leverage to take it to €200m of investment capability.

A first close for the fund, targeting Cologne, Düsseldorf and Bonn, is planned for the first half of next year.

The 10-year fund, aimed at professional and semi-professional investors, is expected to yield 4.5-5%.

Martin Herkenrath, executive director at OMEGA Immobilien, said: “We can invest directly and call up earmarked capital. We will continue to significantly expand this pipeline.”

Hermann Aukamp, Detlef Kuhlen and Knut Riesmeier will join the supervisory board of the firm’s KVG.

Herkenrath said the company’s having its own KVG would take care of investment management and was a “logical step forward”.

“We want to invest in mixed-use residential, office and retail properties, but also strictly retail assets and strictly residential buildings,” he added. 

The fund will buy properties too large for most private investors and too small for most institutional investors.

“The individual asset volumes lie between €3m and €12m,” he said.

“This enables us to take advantage of good acquisition opportunities while keeping the investment risks low.”

Herkenrath said Omega would also create more alternative real estate funds, with a regional focus on high demographic growth regions in Germany.