Management of the Bouwfonds European Residential Fund has introduced a reservation system in the wake of strong investor appetite from primarily institutional investors. The fund manager had already increased its acquisition pipeline and introduced a waiting list for amounts above EUR 5 mln after total inflows far exceeded expectations in the past few months.
Management of the Bouwfonds European Residential Fund has introduced a reservation system in the wake of strong investor appetite from primarily institutional investors. The fund manager had already increased its acquisition pipeline and introduced a waiting list for amounts above EUR 5 mln after total inflows far exceeded expectations in the past few months.
Despite these measures, strong capital inflows below the EUR 5 mln hurdle in the last few weeks and days have led to a critical excess liquidity in the fund. In a bid to safeguard the interest of current investors and protect fund performance, the fund management has decided to temporarily suspend new inflows. The objective is to decrease liquidity levels to 10%, and link future inflows to carefully selected new acquisitions.
Primarily targeted towards German institutional investors and high net worth individuals, the fund is targeting a Gross Asset Value (GAV) of EUR 1-1.5 bn within five years. The portfolio focuses on core middle-class family apartments and houses in city centre locations, residential suburbs, and satellite cities of major agglomerations. Acquisitions focus on existing properties and may also include forward acquisitions and refurbishment projects.
Set up in 2008 just prior to the financial crisis, the Bouwfonds European Residential Fund is aimed at further strengthening Bouwfonds' position as an important and professional player in local European residential markets. The fund claims it offers institutional investors the attractive combination of a low risk profile and steady direct returns.
The fund recently completed several high-quality real estate investments in Germany, Norway, and Sweden, and further acquisitions are in the pipeline in Germany, France, and the Netherlands.
