AXA raises further €2bn for Euro debt strategy

The French insurer said it had raised €2 billion of fresh commitments on behalf of a strategy to make debt investments across Europe backed by prime property.

AXA Real Estate Investment Managers, the Paris-based firm that is part of the insurance giant AXA, said today it had raised another €2 billion of equity commitments for a pan European debt strategy.

The extra €2 billion is understood to have been raised since an announcement last April when it said its Commercial Real Estate Senior 1 (CRE1) fund had reached €530 million of commitments. Since then, it has raised further equity capital both for that fund and via separate account mandates, the firm said via a spokesman.

Major institutional clients and AXA Group companies in Germany, France, United Kingdom, Benelux, Spain and Japan have contributed to the capital.

Adding further detail, Axa said it had invested €2.5 billion of €4.5 billion firepower it has at its disposal, and that it targeted a further €2 billion of debt investments in 2012.

The company has been investing in primarily in senior debt secured against prime properties, which it believes provide the most attractive risk-adjusted returns in the current uncertain economic environment. Spreads on CRE loans have moved up since the onset of the Eurozone crisis in summer 2011, it added.

Of €1.5 billion in commercial property loans made in 2011, some 40 percent of investments were concluded in the last quarter of the year as European banks generally withdrew from real estate finance. These investments were undertaken principally in the UK, France and The Netherlands.

Isabelle Scemama, AXA REIM Head of CRE Finance, said in a statement: “To have been able to raise such a significant level of capital for our commercial real estate debt strategy puts us in a leading position in this market and emphasises the relevance of our prudent approach and specific positioning.

She added: “We increased our investment activity considerably in the final quarter of 2011, particularly in France and Germany, and we would expect to invest further in these regions in 2012 as the banks there could follow their UK peers in adjusting down their lending strategies.