REAL ESTATE - Ilmarinen, the €21.6bn multi-employer pension scheme in Finland, has joined with Dutch pension fund ABP and Denmark's €49.6bn ATP fund in a Finnish property fund set up specifically for them by Aberdeen.
The three committed equal - though unspecified - capital to the fund. In addition, Ilmarinen provided the fund's first acquisition - a €280m portfolio of 47 commercial properties located in Helsinki, Tampere, Turku, Oulu and Vaasa. The fund has a target size of €500m.
Esko Torsti, head of alternatives at Ilmarinen, told IPE Real Estate that investing in the fund supported the fund's decision to increase its overseas and indirect investment in real estate at the expense of directly held domestic property.
"For the time being we're looking at 50% domestic and 50% overseas," he said.
Two factors are driving Ilmarinen's move out of direct investment in real estate. First, Finnish law limits the leverage insurers can use in direct transactions. Second, the fund is focusing increasingly on "a different kind of investment style", said Torsti.
The fund is currently on target for a 10% real estate allocation. "Long-term, I'd like to stay at around that level," he said.
Arne Andreasen, real estate investment manager at ATP, said the Aberdeen fund backed the fund's strategy of "venturing with local experts targeting value-added real estate opportunities". ABP portfolio manager Andrea Attisani said the fund hoped to capitalise on strong macro fundamentals.
In contrast, Ilmarinen last year identified economic growth as "a new risk factor" for real estate investors in Finland, with price increases driven by low interest rates damaging values.