Aberdeen Property Investors launched a new Pan-Nordic property fund for international institutional investors. The fund, Aberdeen Property Fund Sicav Pan-Nordic, is structured as an open ended fund and will benefit from Aberdeen's strong Nordic expertise in order to build an actively managed diversified portfolio of commercial properties with a target fund size of €1.5 billion in the Nordic region.
Total return target is 10-15% on equity per annum after management fees and fund taxes. The dividend target is set at 5 6% and the Fund will allocate all regular cash flow to annual dividends. The first closing is set for the 29th September.
The Fund will invest in the Nordic and Baltic countries, with a risk profile averaging at a Value-added level. The portfolio will be diversified with respect to regions, property types, risk characteristics, composition of tenants and length of lease contracts.
The Baltic allocation of up to 15% provides additional investment opportunities in some very fast growing economies. The Baltic States are becoming more integrated in the economies around them and have developed as a strong gateway for Russian international business.
In the Nordic region alone, Aberdeen is managing property assets of €7 billion through institutional mandates and domestic core plus property funds in Sweden, Norway, Finland and Denmark with local active management, superior performance and diversified property portfolios. The domestic funds are open for new investments on a quarterly basis.
Trygve Sletteberg, Fund Manager, Aberdeen Pan-Nordic Sicav, commented:
"There is tough competition to complete good deals in real estate investments in all markets in Europe, but our on the ground expertise in the Nordic region allows us to identify good investment opportunities, complete transactions and actively manage the properties in order to generate premium fund returns for investors."
Most institutions around Europe, including the UK, still have over 90% of their property allocation in their domestic market. Investment theory indicates that the risk-adjusted returns improve significantly if international allocation is added to the investment universe and that international property should be between 25%-100% of the total property portfolios allocation.
Ubbe Strihagen, International Director of Aberdeen Property Investors commented:
"Property is increasingly a crucial component of institutional portfolios. Investor demand is changing from focusing purely on domestic investments to opportunities further afield that offer both diversification and the potential for higher returns.
This fund is a natural development for us at Aberdeen. The forecasted property returns for this region are very strong, far better than the European average. And we have a very strong position and capabilities to add value through active management in this region. So clearly, we see this fund as a very interesting alternative for institutional investors who seek international property exposure with good performance."
Source: Aberdeen Property Investors