Sparinvest's second institutional real estate fund of funds, Sparinvest Property Fund II (SPF II), has had its first close of just over 100 million. Over the next three years, the Fund aims to build a high-quality portfolio comprising the best property funds in Asia, USA and Europe. The first investment is expected to be made before New Year in the UK, a market offering the best opportunities currently according to Sparinvest Property Investors.
The aim is a return of 10-13%
"Just like Sparinvest's first property fund, SPF II will follow a global investment strategy with a preference for small and medium-sized property funds. We are looking for managers with outstanding asset management skills and a deep network in their local target markets", says Bo W. Jensen, Managing Partner of Sparinvest Property Investors.
The Fund's aim is to generate a return of 10-13% (IRR), approximately half of it in the form of income. After the Fund's three year investment period, the portfolio will comprise approximately 15 funds, resulting in a balanced exposure to Asia, USA and Europe. The UK has been pinpointed as the first target market.
The Copenhagen-based fund of funds manager launched its first global property fund in 2006 with total commitments of approximately 480 million raised from institutional investors. The core-plus portfolio is now spread over 20 countries, comprising almost 500 properties within retail, office, industrial and multifamily through investments in 13 real estate funds.
The Fund will grow larger
In SPF II's first close, four investors committed just over 100 million to the Fund, including PenSam, the eighth-largest pension fund in Denmark, and KIRK KAPITAL A/S, an investment company (a family office) representing part of the family behind LEGO. "We commit to SPF II because we are confident that Sparinvest - via its global network and specialized competencies - will succeed in finding the most attractive property funds in the US, Europe and Asia. Our investment will help us boost our strategic exposure to foreign real estate in the years to come", says PenSam CIO Benny Buchardt Andersen.
The intention is for SPF II to reach the same size as Sparinvest's first property fund. The fund manager has identified a strong interest for the fund and a number of new investors, both from Denmark and abroad, are expected to join the fund in the subsequent closings. "In our view, the general investor sentiment is improving. Many investors now see the advantages of gradually building a global real estate portfolio following the substantial market corrections seen during the past two years", Bo W. Jensen concludes.