IVG launches first Asia fund

The German firm has launched a fund of funds to invest in five pan-Asian vehicles, targeting a maximum final close of $465m.

Bonn-based real estate investment company IVG Immobilien has launched its first closed-ended fund focused on Asia, with a  target size of between $236 million and $475 million.

The fund-of-funds vehicle, set up as separate entity by IVG’s funds division, is expected to hold a final close by the end of the year. The fund will invest in four closed ended pan-Asian real estate vehicles managed by Merril Lynch, MGPA,  Pacific Star, Alpha, and one closed-ended Asia real estate fund by ING. The MGPA, ING and Pacific Star funds have so far received $50 million each from the fund, while the Alpha and Merril Lynch funds have received commitments of $25 million each.

The fund will be called IVG Balanced Portfolio Asia, and its geographic investment exposure will include Japan, Hong Kong, Singapore and South Korea as well as the emerging markets of China, Malaysia and Thailand.

The target funds strategies range from core plus to value-added to opportunity. With a minimum investment criteria of just $10,000 plus 5 percent premium, the fund is open to both institutional and individual private investors from Germany and elsewhere in Europe. The firm says the expected pre-tax yield is between 10 percent and 14 percent, and the fund will mature in June 2016. Alpha’s Asia Macro Trends Fund is targeting a volume with leverage of $2.5 billion; Pacific Star’s Asia Real Estate Prime Development Fund is targeting $750 million; Merrill Lynch’s Asian Real Estate Opportunity Fund is targeting $5 billion; MGP Asia Fund III is targeting $10 billion; and ING Real Estate Asia Value Fund is targeting a $2.5 billion.
IVG Funds currently manages €13.3 billion and initiates the alternative investment vehicles for IVG Immobilien. The division had an investment volume of €427.4 million in 2007.