AXA Real Estate Investment Managers (AXA Real Estate) announces that the German public mutual real estate fund AXA Immoresidential has successfully converted from a public mutual fund to a German special fund ('Spezialfonds'). This is the first ever successful conversion of a German public mutual real estate fund into a Spezialfonds dedicated to institutional investors.
AXA Immoresidential was launched in 2009 as a German public mutual fund specialized on residential real estate investment in Germany and was already structured as an investment vehicle for institutional clients only.
Since the launch of the Fund, the German legal framework for public mutual funds has changed significantly, resulting in the main target clients, German insurance companies, no longer being allowed to allocate new investments in the Fund from their statutory reserve capital, which are deemed as so-called 'tied assets' and may not be used for certain types of investment.
By undertaking a conversion to a Spezialfonds and through the adjustment of the Fund's rules, AXA Immoresidential will remain "eligible" for its target clients and, at the same time, provide a platform for further growth. A decisive item in the Fund's conversion was the proposed change of rules for unit redemptions, which has been designed to fit with German insurance companies and pension trusts recent requirements.
All existing clients have committed to the conversion of AXA Immoresidential. In addition, the new structure has already attracted its first new client, a German bank, which has undertaken a 10 million subscription. For new clients, the minimum investment amount is 3 million.
The Fund's investments at the end of February of 2012 totaled approximately 120 million and AXA Immoresidential is targeting a total fund investment of 500 million by the end of 2013.
Currently the transaction volume of existing and signed properties is 164 million. The Fund has now made a total of 11 investments, including four forward purchase deals, signed since September 2011, totaling 64 million. These developments are well-located in Cologne (two properties), Hannover and Dusseldorf. Approximately 280 units are currently under construction, all of which are being built to a high energy efficiency standard.
AXA Immoresidential is managed by AXA Investment Managers Deutschland GmbH with portfolio and asset management services from AXA Real Estate, the largest real estate portfolio and asset manager in Europe*, with 42 billion of assets under management as at December 2011. AXA Immoresidential's conversion into a Spezialfonds became effective as of March 1, 2012.
Matthias Leube, Managing Director of Real Estate within AXA Investment Managers Deutschland GmbH, commented: "This successful conversion to a Spezialfonds is the first of its kind and not only demonstrates our ability to find the right concepts and the right assets but also underlines how we are able to work closely with our investors and adapt to the changing regulatory environment."
"With the transfer into a Spezialfonds, we have set-up a solid base for the dynamic growth of AXA Immoresidential and are now able to focus on sourcing sustainable and high quality residential buildings which deliver secured cash-flows to the benefit of our investors."
Source: FTI Consulting