Aberdeen Property Investors is launching a new property fund designed to invest in a balanced and well diversified portfolio of real estate in Sweden. In addition to Aberdeens' previously established local property funds in Norway and Denmark, Aberdeen is set to launch a Swedish balanced property fund.
Aberdeen Property Fund Sweden is Aberdeen's first Swedish property fund tailored to institutional investors. The fund, which is structured as a semi-open ended fund, seeks to build a balanced and well diversified core plus portfolio consisting mainly of Swedish real estate. Target size for the fund is SEK 2-5 billion of total capital with maximum leverage set to 60% of gross asset value.
"This fund creates an opportunity for small and mid-sized institutions and pension trusts to obtain broad property exposure and thus, an improved diversification of their total asset portfolios which tend to comprise primarily equities and bonds", comments Kristina Najjar, Head of Product Development at Aberdeen.
The return objective of the fund is to outperform the Swedish SFI/IPD property index by approximately 150 bps p.a. Based on the SFI forecast for the next five years, the fund seeks to deliver a return on equity of 19-24% p.a., equivalent to an ungeared total return of 10-12% p.a.
The fund anticipates having its first closing in October/November 2005 and will be open to both Swedish and international investors.
"It has up until this point been hard for small investors to invest efficiently into Swedish real estate the same way larger institutions have done for several years. The capital required to build a diversified property portfolio has made it an option only for large institutions, such as our clients Folksam, Alecta and Nordea. Property funds facilitate this need", comments Ubbe Strihagen, Marketing Director at Aberdeen Property Investors.
Aberdeen has successfully launched three other property funds since June 2004.
The Norwegian fund has raised committed capital of NOK 2,900 million and invested for 2,200 million in 20 properties in Norway. It is open for new investments and next closing will be in May 25, 2005.
The Danish fund has presently a property value of 52 million, invested in 8 properties. It is open for new investments and next closing is planned for July 1st 2005.
Earlier this year, Aberdeen also launched the first ever Fund of funds with exposure to European property. The fund attracted 161 million prior to its first closing in February 2005 and will be open for new investors until final closing February 2006.
Source: Aberdeen Property Investors