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AXA picked for €485m Europe debt fund

The real estate division of French insurance giant AXA has been selected by five Danish pension funds for a mandate to make senior property loans in Western Europe, mainly concentrating on the UK.

Five Danish pension funds have committed to a €485 million European senior debt fund that will make senior real estate loans in the region.

The selected manager of the debt fund, AXA Real Estate Investment Managers, said today that the vehicle would be called the Kronborg fund and that investors were Sampension, TDC Pension, AP Pension, JØP and DIP.

According to a statement, the five investors have been holding a beauty parade of investment managers in a process described as being “competitive”.

Now that AXA has been picked, it will manage the issuing of large senior loans across all the asset classes in Europe. AXA further explained it would target Western Europe with an emphasis on the UK.

Explaining the overall trend of investors entering into European real estate lending via structured funds, Charles Daulon du Laurens, head of investor relations in the company’s real asset finance group, said: “The bank disintermediation is offering an opportunity for investors to diversify their traditional credit allocation into private debt.”

He added this enabled investors to benefit from “significant liquidity premiums to achieve the yield enhancement they need, particularly in a low rate environment”. He summed up: “The Kronborg Fund is a prime example of agile investors recognising the emergence of a market trend and fully capitalising on it.”

Kronborg is far from the only mandate AXA has won to deploy capital in lending situations in Europe. Indeed, it has a €7.9 billion real estate debt business having structured several products in recent years.

One high profile example was last year’s agreement by Norges Bank Investment Management to enter into a co-investment program with AXA Real Estate and AXA insurance company subsidiaries to deploy up to €600 million in senior loans in the UK, France and Germany.