AXA Real Estate Investment Managers, the real estate investment management business of French insurance giant AXA, has launched a fund aimed at providing Italian institutional investors with a conduit to European real estate.
A rare model, the strategy already has achieved capital raising success, garnering €118 million of equity for its first closing. Enticing investors with a core strategy, the firm has launched the Caesar Fund, which ultimately is expected to attract €200 million in equity. AXA said it has started work on a second and final closing already.
AXA said the capital in the first closing was raised from a “broad mix” of Italian institutional investors, including social security entities, pension funds and insurance companies. In addition, various businesses within AXA Group and certain AXA clients also have contributed capital, although the firm did not reveal how much.
Assuming a loan-to-value ratio of 50 percent, the nine-year long Caesar Fund could grow to €400 million in total firepower. The fund’s investments are expected to return an average annual dividend of 5.5 percent and an IRR of 9 percent, net of fees and taxes.
The Caesar Fund is the second vehicle to be launched by AXA for Italian investors, the first being the Core Italian Properties Fund, which also funded a core strategy. That vehicle is now fully invested in Italian office, retail and logistics properties and has returned between 5 percent and 5.5 percent over the past three years, AXA said.
In a statement on the Caesar fund, Giorgio Pieralli, managing director of AXA REIM SGR, the fund's management unit, said: “To have raised as much as €118 million at the first close of a blind-pool fund is extremely rare in the current market and is indicative of our ability to attract capital in all market conditions.”
Pieralli noted that investment would begin in the UK and French office space as they offered stable, long-term income, which is in line with the fund’s investors’ needs. “As other markets start to recover, we expect to broaden the fund’s investment horizons across Europe, leveraging our pan-European network of local experts,” he added.
AXA REIM currently manages €42 billion of assets in Europe.