ING Real Estate Select, the multi-manager business of the Dutch financial services group, has attracted around €500 million of fresh equity in the first half of the year.
The company said the inflows were from European institutional investors, mainly in the Netherlands, ready for deployment with managers targeting the US and Asian property markets.
Jan Meulenbelt, global head of the Select business said: “The high level of inflows over the last few months represents an endorsement of our policy to protect our investors by holding back capital from the market while real estate values were falling around the world in 2008 and 2009.
He added: “We are now seeing strong interest from pension funds and insurers to re-enter the real estate sector with the US and Asian markets as front runners at this point in the cycle, though we believe the European markets will soon follow.”
Meulenbelt added there was a growing trend towards investment in real estate multi-managers by balanced funds. These are generally looking for a mixture of safety, income and modest capital appreciation in their portfolios and tend to retain a relatively fixed allocation across investment asset classes, he explained.
In the first half of 2010, the most active commitment of capital to funds by ING Real Estate Select was in the US where around $200 million was placed. The company said: “This reflects the opportunities investors now see in the first major global real estate market to experience plummeting values at the start of the credit crisis.”
Pieter Hendrikse, chief executive of parent, ING Real Estate Investment Management, said: “In the wake of the economic crisis there is clearly reduced appetite for risk, with both small and large institutional investors now preferring investments with low levels of leverage.”
Kate Giordano, senior vice president at Select in the US, added it had taken advantage of the market and made some “timely” investments since the start of the year.
“Investors are overwhelmingly interested in funds targeting core assets, but we’ve also managed to secure value-added returns in the industrial and mixed office and retail sectors. I expect we’ll have committed a further $100 million by the end of the year,” she said.
Select has now moved its headquarters from London to The Hague in the Netherlands where ING Group is based. That prompted the resignation of former global head Nick Cooper, who has since joined The Townsend Group. In May, Select’s European chief investment officer, Damien Smith, also joined Townsend following head of Asia, Nicholas Wong’s switch earlier in the year.
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