Finland's Pohjola Asset Management has launched its first real estate fund of funds to invest mainly in European business premises. The vehicle, which is dedicated to professional investors, will seek to achieve a return on equity of over 9%.
Finland's Pohjola Asset Management has launched its first real estate fund of funds to invest mainly in European business premises. The vehicle, which is dedicated to professional investors, will seek to achieve a return on equity of over 9%.
In its first stage of fundraising, the company has raised around EUR 65 mln of equity for the vehicle from a total of five Finnish institutions. The final closing is set for spring 2010, with the fund targeting a total volume of EUR 100 mln.
Pohjola's Real Estate Fund of Funds II Ky (REFoF II Ky) invests in about a dozen European real estate funds, with the investor's portfolio being distributed to over 200 pieces of real estate, mainly in Europe.
'This fund will diversify your product portfolio ever further, enabling investors to enter the real estate market even with a smaller amount of capital and gain access to a tax-efficient real estate portfolio that is diversified and well managed. Most Finnish real estate investors only operate domestically, but in order for them to capitalise on price movements and to diversify their portfolio, many also want to invest in international real estate,' said Mikko Koskimies, executive vice-president of Pohjola Asset Management.
'Real estate prices have fallen in the past few years in certain parts of Europe, and in some markets the fall has continued to this day. Our fund can utilise markets that are interesting to investors, and investments are first channelled to markets in which the price fall is levelling out and yield requirements are expected to fall,' added Markku Mäkiaho, managing director of Pohjola Property Management.
Pohjola Asset Management is acting as the fund's seller, while the investment operations and real estate management are carried out by Pohjola Property Management.
