EUROPE - Pension funds made up 54% of investors committing €588.5m in the final closing of a €2.5bn European development fund set up by AXA Real Estate Investment.

The AUM €40bn insurance subsidiary, which did not provide answers to questions about the fund before deadline, said more than 65% of the equity raised for the Development Venture III vehicle had come from investors in the fund's two predecessors.

Almost one-quarter of the capital raised came from insurers, with a further 14% from sovereign wealth funds.

European investors accounted for 62.5% of the capital raised.

Part of the fund proposition will be to offer investors and investment clubs separate access to development opportunities - "ranging from land or speculative developments through to refurbishments".

A recent survey by law firm Nabarro found fund managers (52%) placed significantly more emphasis on co-investment opportunities as a sweetener to prospective investors than investors themselves (36.1%), who identified fees, membership of advisory boards and approval rates over material from decisions as more important.

In the same survey, investors (59%) identified the availability of investable assets as the biggest challenge facing the sector in 2012.

To date, the AXA fund has deployed capital in four developments - one in London and three in Paris.

Its previous funds deployed capital in developments worth €2.3bn.

AXA Real Estate head of opportunistic funds Laurent Vouin said he expected more deployment opportunities this year as real estate markets continue to "adjust to the new economic environment".

The fund's focus will be on greenfield and brownfield sites, and redevelopment of existing assets.