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Alaska Permanent strikes first deal in Continental Europe

The $50 billion endowment has bought into two shopping malls in Spain and Portugal owned by Immochan, the property subsidiary of French hypermarket chain Groupe Auchan.

The $50 billion Alaska Permanent Fund has struck its first deal in Continental Europe via two shopping malls in Spain and Portugal. The endowment, which is being advised by CBRE Global Investors, has agreed to form a venture to acquire 50 percent of Zenia Boulevard, a regional shopping centre in Alicante, and Alegro Alfragide, a mall in Lisbon from Immochan, the property subsidiary of French hypermarket chain Groupe Auchan.

Under terms of the venture, Immochan will remain as property manager while Immochan and CBRE Global Investors will be joint asset managers in the classic way that other global investors have structured direct deals with operating partners this cycle. Other investments potentially will be added to the strategic joint venture, the parties noted.

The Alaska Permanent Fund, which was created in 1976 to save a portion of the state’s oil revenues, is paying €280 million for its 50 percent share of the two assets. Mike Burns, chief executive of the endowment, said this was the “first high-quality retail acquisitions in Spain and Portugal.”

For CBRE Global Investors, the transaction is the result of being awarded a separate account mandate for Continental European by Alaska in January, extending the existing relationship between the two parties in the US. The mandate is to build a core to core-plus real estate portfolio. In addition, in March, it was announced how Chicago-based LaSalle Investment Management, which also counts Alaska as one of its clients, had won a mandate to advise the endowment on a £250 million (€304 million; $417 million) UK commercial property investment program.

Even though Alaska has a diverse portfolio of assets, including US and non-US fixed-income securities, equities, infrastructure and real estate, it had yet to invest in commercial property in Europe at the point the two mandates were awarded. The endowment has been working to a target asset allocation of 36 percent to securities, 20 percent to bonds and cash, 12 percent in real estate, 6 percent in private equity, 6 percent in absolute return strategies, 4 percent in infrastructure and 16 percent to other asset classes. By ‘risk factor’, it is aiming for a total of 19 percent to real assets because of the inflation hedge that it offers.
The $50 billion Alaska Permanent Fund has struck its first deal in Continental Europe via two shopping malls in Spain and Portugal. The endowment, which is being advised by CBRE Global Investors, has agreed to form a venture to acquire 50 percent of Zenia Boulevard, a regional shopping centre in Alicante, and Alegro Alfragide, a mall in Lisbon from Immochan, the property subsidiary of French hypermarket chain Groupe Auchan.

Under terms of the venture, Immochan will remain as property manager while Immochan and CBRE Global Investors will be joint asset managers in the classic way that other global investors have structured direct deals with operating partners this cycle. Other investments potentially will be added to the strategic joint venture, the parties noted.

The Alaska Permanent Fund, which was created in 1976 to save a portion of the state’s oil revenues, is paying €280 million for its 50 percent share of the two assets. Mike Burns, chief executive of the endowment, said this was the “first high-quality retail acquisitions in Spain and Portugal.”

For CBRE Global Investors, the transaction is the result of being awarded a separate account mandate for Continental European by Alaska in January, extending the existing relationship between the two parties in the US. The mandate is to build a core to core-plus real estate portfolio. In addition, in March, it was announced how Chicago-based LaSalle Investment Management, which also counts Alaska as one of its clients, had won a mandate to advise the endowment on a £250 million (€304 million; $417 million) UK commercial property investment program.

Even though Alaska has a diverse portfolio of assets, including US and non-US fixed-income securities, equities, infrastructure and real estate, it had yet to invest in commercial property in Europe at the point the two mandates were awarded. The endowment has been working to a target asset allocation of 36 percent to securities, 20 percent to bonds and cash, 12 percent in real estate, 6 percent in private equity, 6 percent in absolute return strategies, 4 percent in infrastructure and 16 percent to other asset classes. By ‘risk factor’, it is aiming for a total of 19 percent to real assets because of the inflation hedge that it offers.