EUROPE - Four unnamed pension funds - three German, one Austrian - have each invested €33m in a €300m sustainable office fund.

The fund's manager IVG, which is investing the remaining 20%, confirmed that the fund had already acquired, or was in the process of acquiring, four LEED-certified assets in Berlin, Bonn, Frankfurt and Munich. All four are prime, city-centre assets.

The fund has a target yield of 6% and is employing a gearing level of 45%.

IVG spokesman Jens Friedemann said energy efficiency ratings were high across the four assets and occupancy costs were 25-30% lower than of other buildings.

Although Friedemann acknowledged that tenant risk was "always an issue", he cited the quality of the assets, three of which are new, with the fourth in the process of being restructured.

Asked about the fund structure, Friedemann said: "What it tells you is that we have an alignment of interest. Co-investment means that for the seven, eight, nine or 10 years of the fund, all of the partners have the same engagement."

Friedemann said investors' concerns over alignment and potential fund manager underperformance were driving the creation of club funds. "There really is a trend," he said.

"Pension funds don't want to deal with third parties - they want a club structure."

Friedemann dismissed risks in the club structure itself, despite recent scepticism from some observers that club structures only improve alignment of interest superficially compared with traditional commingled funds. "We have the same idea and the same aims," he said.