Axa suspends Asia investments

Axa Real Estate Investment Management has suspended its investment activities in Asia until market conditions improve, an executive has told Reuters.

Stephen Smith, Axa REIM’s global head of asset management and transactions, said the French insurance company’s plans for expansion in Asia – which included the possibility of launching funds of funds vehicles and real estate investment trusts – had been put on hold for the time being.

He said the region’s property markets were “locked down” at the moment but stressed Axa REIM would continue to “review things as the year goes on” in the expectation of opportunities to come. But he added: “For the time being we are just watching the market, watching clients.”

In September, Axa REIM hired former Pacific Star dealmaker Frank Khoo to lead the firm's Asia operations from its then newly-opened Singapore office.

At the time of the announcement last year, Axa REIM chief executive Pierre Vaquier said Asia was becoming a strategic destination for real estate investors adding: “We want to support our AXA group and third party client efforts in diversification and creation of value.” Of almost $2 billion raised from investors in the 18 months to September 2008, Axa REIM said it had invested 25 percent in Asia.

Smith told Reuters today that Axa had spent very little in Asia since last year because of changing LP appetites. “We have got to get beyond this current malaise. There is absolutely no point in trying to raise capital there when the clients are inherently nervous.

“So we (Axa REIM) need to see signs of stability, we need to see signs of improvement and that’s the time to launch those products.

“We have to talk to the clients (in Asia) and we’ve got to wait to understand what their (risk) appetite is, and then that’s the time to go back into that market,” Smith said.