INTERVIEW: ‘Investor appetite for diversifying abroad is growing’

Pension funds want property investments that offer a good risk-return profile and are sustainable, says Casper Hesp, who recently joined Syntrus Achmea Real Estate & Finance as head of portfolio management.

Hesp's move to Syntrus Achmea Real Estate & Finance follows seven years with non-listed European property funds body INREV, where he was director of research and market information for the past two years. Here he talks to PropertyEU about his new role.

PropertyEU: What made you switch from an industry organisation to a commercial company?
Hesp: Working for INREV was a great experience. As it is a leading industry body you are connected to a wide variety of institutional investors, real estate investment managers, advisors and other market participants, which gives you a broad perspective on the industry. But of course, you experience everything from the sidelines. You hear about deals that have been done, products that have been initiated and companies moving forward. I came to the point that I wanted to use my knowledge and experience and expand my skills in the market.

PropertyEU: What are the main priorities in your new role?
Hesp: The portfolio management team consists of seven people including myself and we are part of the overall investor relations business unit within Syntrus Achmea Real Estate & Finance. In portfolio management we advise our clients on their investment strategy and portfolio composition and we monitor the execution of those strategies. This includes overall allocations to real estate, where and when to buy and sell and the ongoing composition of clients’ portfolios. As Syntrus Achmea´s real estate team manage over €14 bn and service over 50 institutional clients - all with their own needs and portfolios - this is quite a task.
In addition, I will be involved with business development activities. We see growing demand from our current clients to diversify by investing internationally. One of the ways of doing that is via our AREA fund of funds products. International investors are also looking at the Dutch market now that conditions are improving. Finally, we will further expand our real estate debt business and look into the possibility of launching new products there.

PropertyEU: How will your overview of the fund universe gained at INREV help you at Syntrus Achmea?
Hesp: The great thing about working at INREV was that you were aware of all the major topics and trends in the real estate industry. One of the fallouts from the global financial crisis was that much of my time had been focused on what does and doesn’t work in the fund management industry. I’ve also seen the growing importance of transparency and consistency in reporting. For example, giving a clear insight into performance and costs will become even more important in the future. Industry standards provided by organisations such as INREV and EPRA play an essential role in this. Syntrus Achmea Real Estate & Finance is very focused on adapting and ensuring compliance with industry standards in its interaction with clients.

PropertyEU: What are the main challenges facing real estate portfolio managers today?
Hesp: What you see in the current market is lots of competition for core assets and this is reflected in downward pressure on yields. As a portfolio manager today, the challenge is to find the right properties with a good yield but with acceptable risks attached, that match the investment requirements of the client. In addition, the investment landscape has become more challenging with intensified regulation, increasing competition from other asset classes and a more globalised industry, which are important to bear in mind and understand as a real estate portfolio manager.

PropertyEU: What are the main challenges facing pension funds?
Hesp: For pension funds the task of investing has become a fine balancing act. They are looking for investments with good risk-return characteristics that also cover their future liabilities. Of course, they must also consider investing in a responsible way, with more and more attention being paid to sustainability. Real estate is also becoming increasingly international, and pension funds need to look at what this means for their investment approach and how they can benefit from diversification outside their domestic markets.

PropertyEU: What are your interests outside the office?
Hesp: I spend a lot of time on family life: I have a one-year old son and we enjoy every step in his development. Besides this I am a fan of Feyenoord football club in Rotterdam and enjoy going to their home games.