The debut real estate secondaries fund of investment manager Aberdeen Asset Management has been oversubscribed by investors, PERE can reveal.
The firm will announce shortly how its Aberdeen European Secondaries Property Fund of Funds reached its hard cap of €300 million in commitments from investors two months before its official closing date in September.
The fund received its first round of equity commitments in February, raising €151.5 million from investors. Those to have backed the fund include Första AP-fonden – also known as AP1 – and Korean investor Korea Scientists & Engineers Mutual-aid Association. Aberdeen itself backed the fund too.
Andrew McCaffery, global head of alternatives at Aberdeen, said: “The secondaries market is particularly attractive with an increasing number of opportunities with investors becoming more active in the management and composition of their indirect property portfolios.”
The fund already is 38 percent committed, the firm said, to eight investments that are exposed to more than 200 properties across Europe. The firm noted how the majority of these investments had been sourced from investors seeking to rebalance their portfolios as a result of either strategic shifts or changes in regulation in the region, such as those relating to Solvency II and Basel III.
The firm said these factors would enable it to generate value-add returns for what is described as stabilized and de-risked portfolios. “Our detailed knowledge regarding the funds in which secondary units are traded, and the size and depth of the team, puts us in a strong position to be able to analyze opportunities within a short timeframe.”
Aberdeen said its investment universe consisted of more than 100 funds made up from sector, country and regional strategies.
The real estate secondaries market has long been considered a small niche within the private equity real estate universe. However, in recent years, the space has seen new entrants as increasing numbers of institutional investors become sold on the idea of profiting from dislocations within existing fund ownerships.
While still representing a small contingent of general secondaries trading – 14 percent of the $5.3 billion to have changed hands last year according to advisory firm Setter Capital – the space is gaining the attention of groups keen to include secondaries investing among their suite of investor options either via bespoke vehicles like that of Aberdeen, or within wider indirect strategies, like a recently formed strategy by Townsend Group for the National Pension Service of Korea.
One such new entrant is StepStone, the New York-based private markets firm which last month absorbed secondaries-focused Clairvue Capital Partners. Another is private equity firm Carlyle, which acquired Metropolitan Real Estate Equity Management at the end of 2013. Some institutional investors have accessed the market directly, like Dutch pension manager Blue Sky Group.