AREIM attracts GIC, APG and AP4 into second fund

The firm originally launched as the Nordic investment partner to global heavyweights The Blackstone Group and ING Real Estate Investment Management, has attracted equity commitments from some of the world’s largest institutions for its second value-add fund.

Andersson Real Estate Investment Management (AREIM), the Stockholm-based private equity real estate firm, has raised more than half of the capital it wants for its second value-add fund.

The firm, which was formed in 2003 primarily to be the Nordic investment partner of groups including The Blackstone Group and ING Real Estate Investment Management, is expected to announce as soon as tommorow that it has raised SEK1.6 billion (€180 million; $240 million) for its AREIM Fund II vehicle in a first closing.

AREIM has once again attracted two of the world’s biggest institutional investors into the fund, the Government of Singapore Investment Corporation (GIC) and Algemene Pensioen Groep (APG) after both invested in its first fund. AP4, the Fourth Swedish National Pension Fund has also invested this time around.

AREIM is hoping to complete capital raising for the fund in six months time and is targeting a total haul of SEK3 billion. The fund is slated to run for eight years and include a three year investment period.

While fundraising by Europe’s private real estate investment firms has largely been poor in 2012, firms operating in and focused on the Nordics have fared comparatively well. The region is regarded by investors as something of a safe haven decoupled from Europe’s widespread economic woes.

Other notable fundraising success in the Nordics include AREIM’s Stockholm neighbour Niam which this year finished raising its €719 million fund while the smaller Nordic Real Estate Partners from Copenhagen collected €121 million and Realkapital Partners, an Oslo-based outfit, garnered NOK200 (€27 million; $35 million).

Leif Andersson, chief executive officer of AREIM, said: “Investors still view the Swedish market favourably and in recent weeks we have seen strong interest from other domestic and international investor groups. We have ongoing discussions with additional interested parties and are confident that we will expand our investor base in the near future.”

AREIM Fund II is expected to be invested largely in Stockholm although outlays elsewhere in Sweden may also occur. The firm is understood to have identified a pipeline of potential office acquisitions where it can add value and is also plotting various retail and residential developments. The total anticipated value of the assets in the fund once it has been completely committed is between SEK6 billion and SEK7 billion.

The fund’s strategy is much in line with AREIM’s first fund which was launched in the challenging vintage period of late 2007, immediately prior to the start of the global financial crisis. The SEK2.1 billion fund is now fully invested and AREIM said it was on track to deliver its expected value-added returns (typically around the 15 percent IRR mark). The fund has been invested in 30 properties across Sweden, 60 percent of which are offices, 30 percent in retail and remainder in residential properties.

No placement agent was used for AREIM’s latest capital raising effort.