ING Real Estate Select, the multi-manager investment business, attracted around 500 million in inflows from European institutional investors, mainly in the Netherlands, in the first half of 2010 for placement with managers targeting the US and Asian property markets.
Pieter Hendrikse, CEO ING REIM Europe and responsible for ING Real Estate Select said: "In the wake of the economic crisis there is clearly reduced appetite for risk, with both small and large institutional investors now preferring investments with low levels of leverage. There is also demand for true real estate fiduciary managers, who put their clients' interests first, managing portfolios by optimizing risk versus returns and valuations relative to the cost of capital, while maintaining broad diversification in their investments."
Jan Meulenbelt, Global Head, ING Real Estate Select said: "The high level of inflows over the last few months represents an endorsement of our policy to protect our investors by holding back capital from the market while real estate values were falling around the world in 2008 and 2009. We are now seeing strong interest from pension funds and insurers to re-enter the real estate sector with the US and Asian markets as front runners at this point in the cycle, though we believe the European markets will soon follow."
Meulenbelt added that there is a growing trend towards investment in real estate multi-managers by balanced funds. These are generally looking for a mixture of safety, income and modest capital appreciation in their portfolios and tend to retain a relatively fixed allocation across investment asset classes.
In the first half of 2010, the most active commitment of capital to funds by ING Real Estate Select was in the US where around US $200 million was placed. This reflects the opportunities investors now see in the first major global real estate market to experience plummeting values at the start of the credit crisis.
Kate Giordano, Sr VP Investment Manager of ING Real Estate Select in the US said: "There were some timely investment opportunities that we spotted and were able to take advantage of in the US since the start of 2010. Investors are overwhelmingly interested in funds targeting core assets, but we've also managed to secure value-added returns in the industrial and mixed office/retail sectors. I expect we'll have committed a further US $100 million by the end of the year."
Source: ING Real Estate Investment Management
