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APN Property Group pulls out of blind pools

The $1.6 billion Melbourne-based real estate fund manager is to halt investing in private real estate via blind pools, and will only undertake opportunistic investments on a deal-by-deal basis from now on.

Melbourne-based APN Property Group, an Asia Pacific real estate fund manager based in Melbourne, has chosen to not raise any more blind-pool opportunistic real estate funds, and will now only engage in opportunistic real estate deals on a select basis, PERE has learned.

APN currently has two blind-pool funds under management, the A$110 million (€75 million; $100 million) APN Development Fund I and the A$105 million APN Development Fund II, closed in 2006 and 2008 respectively. Both funds are fully invested now, and it is understood that the firm will see both funds through to realization over the next three to five years.

The shift away from blind-pool opportunistic funds comes in response to demand from Australian institutional investors, a source close to the matter explained. The vast majority of the limited partners for APN’s private equity real estate funds were Australian super funds or pension funds, and it is now more common for these types of investors to play active roles in their real estate investments. Particularly for opportunistic real estate, Australian institutions have also been more vocal in their demands for greater visibility and control over how their resources are invested. As a result, they have committed to fewer blind-pool funds.

Going forward, APN is planning to engage in opportunistic real estate investments via joint ventures or partnerships including investment clubs and single asset funds. It is already understand to be in talks with institutional investors on such transactions.

APN still has the team and capabilities to make opportunistic investments even though the strategy shift has come a few months after the firm’s managing director David Blight left the firm to set up his own REIT, Pacific Retail REIT. Its listing on the Australian stock exchange has been waylaid however after it failed to raise the A$367 million from investors it was hoping for, according to local media reports.