Union Investment sees further growth of institutional business in 2013

Union Investment is predicting further growth of the institutional part of its business in 2013 after receiving €1.5 bn in binding capital commitments during 2012.

This marks a 50% increase on the EUR 1 bn in institutional commitments for real estate received by the Hamburg-based asset manager in 2011.

‘We believe there are excellent opportunities to expand our market position, especially with regard to thematic funds and pooling vehicles,’ said management board member Christoph Schumacher.

Union Investment already entered the infrastructure segment in 2012. A new institutional fund focusing on infrastructure, UniInstitutional Erneuerbare Energien Sicav-SIF, received commitments of EUR 48 mln, in line with the company's planning, in the first close.

Subscriptions totalling around €620 mln were received in 2012 for the institutional open-ended real estate funds UniInstitutional European Real Estate and UniInstitutional German Real Estate.

UniInstitutional German Real Estate fund, which is primarily designed to meet the investment needs of churches, cooperative banks and foundations, was oversubscribed by a factor of more than three within five hours of its launch in mid-October.

Capital inflow was deliberately limited. To ensure a broadly diversified investor base from the start, each investor was only able to subscribe to a maximum of €2 mln worth of units. The minimum investment amount for the fund is €500,000.

Union Investment acquired some €960 mln in capital commitments for real estate funds dedicated to institutional investors in 2012. Of this amount, commitments of around €850 mln are accounted for by individual mandates that Union Investment handles on behalf of pension funds, banks and insurance companies, while some €110 mln came from new and follow-up subscriptions to existing funds for institutional investors.