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Fidelity raises €111m for non-UK Euro core fund

The London-based investment manager said the success of its flagship fund’s capital raise was due to its non-UK focus. 

Fidelity International, the London-based investment manager, has raised €111 million for its open-ended European-focused core real estate vehicle.

The firm began its latest round of fundraising in December last year and since then it has received major backing from institutional investors in France, Germany, Switzerland and Ireland.

Fidelity International said it would be investing in core, multi-asset real estate via the vehicle, called the Fidelity Eurozone Select Real Estate Fund, which has a capital raising target of €250 million. The fund, which is aimed exclusively at institutional investors, has achieved an annual return of 9.2 percent over the last five years, with a distribution yield of around 4 percent, the firm said.

Neil Cable, head of real estate at Fidelity International, said the success of the fund was down to it offering “nil exposure” to the UK real estate market.

“Fidelity's focus on high quality income from institutional grade real estate in the core Eurozone markets has resonated with investors seeking alternative sources of investment grade income,” Cable said.

“Post Brexit, investors have also seen the merits of a core Eurozone strategy with Fidelity's fund being one of the very few core, open-ended funds offering with nil exposure to the UK and peripheral Europe,” Cable added.

Fidelity said it would be embarking on its next round of capital raising in the second quarter of this year. Investor demand, the firm added, is expected to come primarily from Europe, but also Asia-Pacific and Australia.

Fidelity has assets under management of £66.6 billion, as of December 31, 2016.