REAL ESTATE – Threadneedle is to launch a pooled property fund of funds in response to demand for diversified European exposure from UK and continental European pension funds, the fund manager announced last week.
The Luxembourg-listed SICAV will invest in both core and specialist funds across Europe to ensure diversity.
A Threadneedle spokeswoman said it would appeal to both UK pension funds and those in continental Europe.
She said UK investors were looking for diversification in other European real estate markets. "Investors are asking where else they can invest. Investing via a fund of funds gives them diversified exposure," she said.
"In continental Europe, you have strong property markets in Germany, for example. Investors are still after exposure to different European countries, although they’re obviously ahead of the UK."
Threadneedle will run the fund with CB Richard Ellis, which it said would provide local property market knowledge. Threadneedle will focus on analysing the performance credentials and risk profiles of potential investments.
The fund will adopt a top-down strategy, identifying strong-performing markets "within acceptable low-risk parameters and the desired level of geographic diversification", Threadneedle said in a press statement. CBRE will then compile fund shortlists.
The fund has an annual target return of 10%.