Aberdeen Property Investors has raised EUR 121 mln in the first closing of its new closed-ended European fund of funds. The launch of Aberdeen Indirect Property Partners II (AIPP II) comes two years after Aberdeen's first fund of property funds, AIPP, with commitments of EUR 623 mln. AIPP was the first of its kind in Europe. Both funds are managed by Aberdeen Property Investors Indirect Investment Management (API IIM).
Aberdeen Property Investors has raised EUR 121 mln in the first closing of its new closed-ended European fund of funds. The launch of Aberdeen Indirect Property Partners II (AIPP II) comes two years after Aberdeen's first fund of property funds, AIPP, with commitments of EUR 623 mln. AIPP was the first of its kind in Europe. Both funds are managed by Aberdeen Property Investors Indirect Investment Management (API IIM).
AIPP II, like its predecessor, will invest in a number of carefully selected property funds across Europe. It aims to give investors an annual internal rate of return of between 10% and 14% net, including an annual distribution of 5%. It will be a closed ended vehicle with a lifespan of up to 10 years following the final closing.
Aberdeen said the fund has been structured with lead investors committing EUR 121 mln in the first closing. The target size of the fund is EUR 600 mln and it will take on new investors until October 2008 or until fully subscribed.
Tomas Otterud, deputy managing director of API IIM and fund manager of AIPP, commented: 'I would describe the fund as opportunity driven but not opportunistic. We believe yields have bottomed out across Europe and as a result expect property market returns to come down to more sustainable levels going forward'.
'We are, however, confident that double digit returns can still be achieved in the asset class through active management, joint ventures, alternative sectors and utilisation of market inefficiencies. Performance between funds is likely to diverge and consequently manager selection will be even more important going forward.'
Otterud said the latest available audited figures indicate that AIPP has delivered a net annualised Internal Rate of Return of 18.6% since inception, outperforming its target of 10-14%, with only 46% leverage exposure and 3% development exposure.' According to our performance attribution analysis the largest contributing component has been our manager selection,' he added.
