AXA Real Estate revealed this morning it had raised a total of €588.5 million for European Development Venture III, a European fund offering opportunistic-like returns to investors.
Paris-based AXA has secured commitments mainly from pensions funds and insurance companies for its Europeean Development Venture III, which is geared towards investing in green and brownfield sites and existing properties in need of extensive redevelopment.
DVIII, which the fund is being called for short, attracted pension funds (54 percent), insurance companies (24 percent), sovereign wealth funds (14 percent) and funds of funds (8 percent). The limited partners are mostly European with two thirds coming from the region. North American investors represent 19.5 percent of the investor base, while the Middle East accounts for 17 percent.
Two thirds of the fresh commitments have come from investors in Axa’s predecessor development funds, which were smaller at €405 million and €200 million. The two predecessor funds have made gross annual internal rates of return of more than 40 percent project-by-project, said AXA. For this latest offering it has so far made one prime office development project in London and three in Paris.
Denis Morel, senior fund manager of DVIII said: “We have a number of very exciting and high quality projects in the fund, including Sixty London in the City of London and the new Coface headquarters in Paris, and these are currently progressing well to ensure delivery at an optimum time in the market cycle.”
Axa began marketing the fund in 2010 when it held a first close of €230 million including co-investments from insurance companies of AXA Real Estate’s parent company. At the time of close it said the fund would be capped at €600 million and was aiming for a target IRR of 25 percent.