Edinburgh-based Standard Life Investments (SLI) has launched the new Canadian Real Estate Fund (CREF), holding a first close on C$77 million (€55.6 million; $75.5 million) in equity.
The real estate subsidiary of Scottish savings and investment business Standard Life has structured CREF as a main vehicle targeting Canadian investors as well as a feeder fund for non-Canadian commitments. Such a structure is intended to provide both Canadian and international institutional investors access to the Canadian real estate market. SLI hopes the new vehicle, which has one year to raise the remainder of its C$150 million target, will appeal to investors looking to diversify their portfolios with North American assets beyond the United States.
SLI told PERE that the fund, which has a core-plus strategy, will seek a “broad and balanced portfolio geographically” throughout Canada and plans to invest across all sectors including office, retail, industrial and logistics. CREF will invest in more development opportunities and riskier assets than the firm’s core vehicle, Standard Life Real Estate Fund, which has raised C$1.3 billion in capital and invested in 100 properties in Canada so far. The fund has reported returns of 9.4 percent annually since its launch in December 1982.
CREF will differ from the firm’s first fund in its closed-end strategy and in its emphasis on international investors. “Traditionally, there have been Canadian funds by Canadian companies for Canadian investors, but those local funds have never really sought global money,” said a company spokeswoman. “We’ve been very successful in the Canadian market, but we haven’t focused on giving global investors this opportunity before, so it’s very exciting.”
SLI has a long history in the Canadian real estate market. The firm opened its first Canadian office in 1973, while parent company Standard Life has been present in Canada since 1833. As of June 2013, SLI had £10.6 billion in real estate assets under management, with the firm’s overall assets totaling £178.8 billion.