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Dutch fund goes for global indirect approach

SBZ, a Dutch pension scheme, is switching €135 million of direct investment in Dutch real estate for deployment in global markets via unlisted and listed funds.

Dutch fund SBZ is making €135 million available to invest in unlisted and listed real estate funds globally.

In a statement, Russell Investments said it had been appointed to advise on executing the new strategy following a decision by the fund’s investment committee in 2008.

Up until recently, SBZ invested in real estate directly in the local Dutch market. However, a strategic review has concluded six percent of the fund’s total assets should be in foreign countries.

According to that review, the optimum approach would be to switch to an indirect approach with 25 percent being in Netherlands’ unlisted property funds, 50 percent in other European country funds, and 15 percent in US funds.

Around 10 percent should be in listed global property funds.

Of the entire allocation, thirty percent should be invested in value added and opportunistic funds.

Derek Williams, director of real estate at Russell Investments said this was an opportune time to build a global indirect portfolio.
”Many funds that previously were over-valued have experienced considerable price correction,” he said. 

The decision underlines that the unlisted route is still in favour for some large investors despite recent signs that LPs are preferring to invest in smaller clubs or in a separate account managed by a third party.

Among significant pension funds recently deciding to go down the unlisted property funds root is the Unilever pension fund, Progress. Like SBZ, that scheme is based in the Netherlands.