Folksam, a major Swedish insurer, has in cooperation with the Aberdeen Property Investors team for indirect investments (API IIM) developed a unique pooling structure - AIPP Folksam Global a property fund of funds open solely to companies within the Folksam Group. This new type of instrument for indirect property investments is particularly suitable for large multinational companies with separate pension plans.
By using AIPP Folksam Global, companies within the Folksam group can invest via a joint Luxembourg-based structure. This offers the Folksam Group the potential to coordinate its indirect property investments, thereby ensuring cost efficiency and offering greater diversification for the group as a whole.
Esbjörn Wincent, head of alternative investments at Folksam commented: "I really value working with Aberdeen, which has succeeded in developing and implementing a structure based on an idea that I have had for a long time. Folksam has been an investor in Aberdeen's fund of funds over a number of years. Their broad experience, professionalism and business acumen make them an excellent partner for Folksam now that we have opted to increase our allocation to international indirect property investments."
AIPP Folksam Global is an umbrella fund with two sub-funds one for Asia and one for Europe. The initial investment capital is more than 100 million distributed equally between the sub-funds. The structure is open for additional annual capital injections. Aberdeen plans to make an average of one investment in Europe and Asia, respectively, each quarter so that the pool after the first three-year period will contain 10-12 funds in each region. Folksam and Aberdeen are represented on the board of the fund's management company, which decides on investments.
This is API IIM's second large exclusive mandate on behalf of a Swedish investor. Previously, it was given the task of building up portfolios of European and Asian property funds for AP3, with an investment of 250 mln. in each region.
According to Lars Graneld, in charge of the Folksam assignment, it is important to underscore the difference between the mandates, "Our cooperation with Folksam is different in that we use a separate Luxemburg structure through which the investments are made. This permits investments from a range of Group companies from different countries. We believe this can be an attractive structure for a number of multinational companies, since it offers economies of scale, efficiency enhancement and the concentration of their indirect property investments to one single place."
Anders Åström, MD of API IIM adds: "We are pleased that Folksam has chosen us to continue to build up its indirect property exposure, both in Asia and Europe. We have been pioneers in the indirect fund market and, among other things, we launched the first European fund of property funds in 2005. We have seen rapid progress since then with additional launches of fund of funds products in Europe and Asia. In September this year we launched our second Asian fund of funds, AIPP Asia Select. Overall, we have investment mandates exceeding 2.8 billion in equity, which gives us a strong position and excellent market insight."
Source: Aberdeen Property Investors