AEW Europe expands strategy with €500m fund

The Paris-based firm’s latest value-add vehicle will invest across more property sectors and not just offices like its predecessor fund.

AEW Europe, the Paris-based real estate investment management firm, is aiming to raise €500 million for its latest pan-European value-add fund.

It is understood the firm started marketing for the fund in the last fortnight, with the US institutional investors its first port of call.

However, unlike AEW’s predecessor vehicle, Europe Value Investors, the firm plans to invest across real estate asset classes, as opposed to focusing on offices exclusively.

The incoming fund should have investment firepower of more than €1 billion with leverage and will look to make returns of 12 percent to 14 percent.

Although technically also still in fundraising, Europe Value Investors is nearly fully committed and has passed its hurdle investment level whereby the firm can market a successor fund. That vehicle has attracted €320 million from investors so far.

Notable acquisitions for the vehicle including three properties in London, St Clement’s House, 24-28 Martin Lane and 65-68 Leadenhall Street. The firm also acquired two assets in Germany and three in France for the fund.

AEW Europe has been busily expanding its operations this year. Back in March, Nikolas Koulouras and Alexander Strassburger were hired as executive directors in AEW's London office. Strassburger joined from Washington, DC-based private equity firm the Carlyle Group where he was country head of Germany. Koulouras joined AEW Europe from Salamanca Group, where he was director and co-head of real estate.

In July the firm also hired Jean-Philippe Gaudin as head of asset management in its Paris team, and Thomas Leinberger as a director for asset management, based in the AEW Europe’s recently opened Frankfurt office.

On the transaction side the firm teamed up with Chinese sovereign wealth fund, China Investment Corporation (CIC), in July to acquire 10 shopping centers in Belgium and France. The purchase price of the portfolio was not disclosed but the sellers, CBRE Global Investors, valued it at over €1.3 billion.

The firm is also actively fundraising a credit strategy. Last month the firm appointed Cyril Hoyaux, formerly of JLL France, as head of debt funds management ahead of the launch of a €750 million debt fund.