ING launches €1bn European fund of fund

ING Real Estate is aiming to invest €1 billion ($1.3 billion) in property funds across Europe through its new in-house product, The Eurosiris Fund. The fund of fund will be managed by ING Real Estate Select, the firm’s newly named global multi-manager business division.

The Netherlands-based global asset manager is to become the latest company to launch a European fund of fund product as the asset class continues to gain popularity in the region and institutional investors look beyond their domestic markets.

The target size of the fund is €1 billion, although there is no upper limit. The fund will be invested over the next three years.

In the past few weeks, both CBRE Investors and BlackRock revealed similar moves, suggesting that demand for commercial property on the Continent is growing.

In ING’s recent annual investor sentiment survey, 65 percent of UK investors said they were seeking continental European investment, a 30 percent increase from last year. Between 2007 and 2009, ING predicts total returns from property will be 11.2 percent.

Nick Cooper, global chief executive of ING Real Estate Select, said in a statement: “UK demand to add continental European investment to their portfolio reflects our desire to add further high performance, ‘alpha’ returns over the next three year period.”

It is the first time that ING has launched a continental European property fund of fund.

The company has revealed that it will be charging a management fee of 10 percent of all excess returns above the 8 percent target return, and a 20 percent fee for excess returns above 9 percent.

Eurosiris will invest in a selection of core and core-plus property funds run by third parties as well as the company’s own funds, although it is limiting the amount it can invest in an ING fund to 25 percent.