BVK refocuses on Europe after US foray

Bayerische Versorgungskammer (BVK) has increased the mandate it awarded to CapMan Real Estate by 25 percent, meaning the Finnish fund manager now has a war chest of €500 million to invest in Nordic property.

In July last year, the two firms announced an original €400 million mandate for CapMan to invest in residential assets across Sweden, Denmark, Norway and Finland.

“We have strong know-how in our real estate team when it comes to Nordic real estate and the co-operation with BVK demonstrates our ability to serve international customers”

– Joakim Frimodig

To date, CapMan has acquired four assets on behalf of the mandate, the most recent of which was the purchase of two residential properties in Denmark: a newly-built asset in Copenhagen and a forward purchase project in Aarhus. The properties cost a combined €125 million, meaning around €300 million has been invested on behalf of BVK so far.

Under the agreement, CapMan sources deals, advises on transactions and manages assets for the BVK fund. The Helsinki-based firm also receives an annual advisory fee and a performance fee on the mandate.

In late 2015, BVK announced it would be handing out a string of large real estate mandates to private equity real estate firms. Since launching its new strategy, it has inked five deals for a total of €6.5 billion, largely for European assets, across numerous geographies and sectors, though residential is clearly its preference.

In January 2016, BVK announced the first of these mandates when it teamed up with the European arm of Houston-based fund manager Hines to launch a €1.3 billion separate account program to invest in European high street retail. So far assets have been acquired in Denmark, Spain, Ireland, France and the UK.

Later in 2016, BVK inked three more large mandates worth a combined €4.4 billion. Following July’s original €400 million Nordic residential mandate to CapMan, the pension fund handed Patrizia Immobilien, the Augsburg, Germany-based real estate investment manager, a separate €400 million check to create a pan-European residential property portfolio. By October, BVK had also awarded Frankfurt-based fund manager Universal-Investment a €3.6 billion contract, its largest individual mandate to date, to invest in European and Asian residential and office assets.

Then in 2017, the pension fund announced it was intending to target US real estate for the first time, adding that it would hand out four specialized mandates focusing on the US market. The first of those deals emerged in April when it selected USAA RealCo to invest €750 million in multifamily assets in core, build-to-core and value-added markets in premium, central neighborhoods within major cities across the US.

Regarding its increased mandate with BVK, CapMan chief executive Joakim Frimodig said: “We have strong know-how in our real estate team when it comes to Nordic real estate and the co-operation with BVK demonstrates our ability to serve international customers.”