L’Établissement de Retraite Additionnelle de la Fonction Publique (ERAFP), the French pension fund manager for 4.7 million civil servants, will start the hunt for a pan-European real estate investment manager next year as it seeks a significant exposure to the asset class.
The manger is also expected to launch a separate requirement for investments in France and the two mandates are understood to be part of a strategy to invest around 1 percent of its current annual inflow of €1.5 billion in the asset class annually.
According to Olivier Bonnet, head of socially responsible investing at ERAFP, declined to confirm how large each real estate mandate would be given that its asset allocation for 2012 has not yet been validated. But he told PERE the organisation was previously only allowed to invest in bonds and equities and now is expanding its €11 billion portfolio to include real estate.
Bonnet said: “Obviously, we want to diversify our assets under management and that is why we have launched these new mandates regarding real estate.”
Indeed, only last month, the pension fund dipped its toes in the water by selecting Paris-based AEW Europe on a separate account basis to acquire a Paris office property, stipulating that the first deal must not exceed a lot size of €40 million. However, looking ahead, the pension plan would need a larger market than just Paris to invest in, hence the need for a wider geographical focus and additional managers next year.
To read more, see this month’s PERE magazine.