Bayerische Versorgungskammer (BVK), Germany’s biggest public pension fund manager, is aiming to double its indirect real estate investments globally within four years, PERE can reveal.
The Bavarian institution also is targeting a comprehensive rebalancing of its international exposure which should result in approximately 25 percent of its indirect assets residing in Asia, according to Rainer Komenda, BVK’s head of real estate funds.
Komenda told PERE at the EXPO REAL conference in Munich today that BVK was on a mission to greatly increase its indirect real estate holdings which today account for about €6 billion of BVK’s overall approximately €10 billion of real estate. The total number includes about €4 billion of German property and some real estate securities too.
The news of BVK’s ambitious plans comes one week after PERE revealed that BVK was to award €700 million of separate accounts to three Asian fund managers in a bid to address what Komeda described as a grossly underweight allocation to the Asia Pacific region.
Alpha Investment Partners, the real estate investment management business of Singapore-listed property company Keppel Land, CBRE Global Investment Partners, the joint venture platform of Los Angeles-based CBRE Global Investors, and Hong Kong-based Arch Capital are expected to be allocated the capital in equal measures for a range of Asian risk and return strategies.
Those mandates, which will be awarded on a non-discretionary basis, should more than double BVK’s exposure to real estate in Asia. The pension fund manager currently has about €500 million in assets in the region, thanks largely to other separate account mandates previously awarded to Chicago-based investment manager LaSalle Investment Management and Swiss investment bank UBS.
While Komenda would not discuss the new mandates, he told PERE: “From a long term perspective we still believe Asia’s demographics are good and it is still a growth region.”
He said he hoped BVK would grow its asset base in Hong Kong, Singapore, Japan, Australia and China primarily but also gain a foothold in the markets of the Philippines and Thailand, two markets where Arch Capital has a track record.
BVK is responsible for approximately €60 billion of capital on behalf of approximately 1.9 million pensions.