IVG reveals plans for Italian fund platform

Germany's IVG Immobilien is joining forces with Italian REIT Beni Stabili to launch a joint fund management plaform which will promote and manage fund products for Italian institutional investors from an office in Milan.

Steffen Ricken, which heads IVG Institutional Fund business, says the move reflects the company's strategy to further expand its international investment and investor platform following the acquisition last year of Hypo Real Invest in Austria.

'As part of a recent restructuring and repositioning of IVG we have been targeting a diversification of our investor universe and we have been looking at different markets outside of Germany, which currently represents around 80% of our institutional investment money,' Ricken said.

Under the agreement, Beni Stabili Gestioni SGR, the fund management arm of Beni Stabili Group, will acquire an initial 5% stake in IVG SGR and later increase its interest to 49%. The initiative allows Bonn-based IVG to take advantage of Italian investors’ need to diversify their property portfolio, Ricken added. ‘Institutional investors are nearly 100% invested in their home country and have an urgent need to diversify outside of Italy.'

The German company has been working extensively in Italy for 18 months in an effort to set up a partnership with an Italian real estate player. ‘Beni Stabili is a leading player in Italy and has a very similar business model to IVG,’ he noted.

The companies claim the operation will 'perfectly' combine the strengths of IVG and Beni Stabili Group, with Beni Stabili providing a network of contacts with institutional investors in Italy and IVG offering Europe-wide asset management expertise.

Beni Stabili Gestioni currently manages 13 investment funds with a total asset value of more than EUR 1.5 bn. IVG Immobilien Institutional Funds manages assets worth EUR 12 bn in Europe but the Italian arm is still in its infancy.

The two partners aim to collect the first EUR 100 mln for a pan-European real estate fund from institutional investors by summer 2013. Final closing with total equity of up to EUR 200 mln is scheduled for the end of 2013. The fund will invest in income-producing office and retail properties in key European cities starting from London, the major German cities and Paris. It will have a targeted investment volume of EUR 400 mln and a target cash-on-cash return of 5%. Beni Stabili will be responsible for fund raising while IVG will perform asset and fund management.

Ricken said the partnership is rolling up its sleeves to market the fund among Italian institutional investors. ‘We want to become one of the leading institutional fund platforms in Italy. We believe there is potential over time to reach over EUR 1 bn of assets under management,’ he said.