Aberdeen Standard Investments (ASI) has announced the launch of the European Long Income Real Estate Fund. The Fund’s first close was held on 31 October 2019, with over €100m of equity committed from six institutional investors located in six different countries. Structured as an open-ended vehicle, the Fund is expected to grow considerably in size over time.
With interest rates and bond yields at historic lows, the Fund will appeal to institutional investors looking for alternative sources of income that tap into the so-called ‘illiquidity premium’. The Fund will follow a similar investment strategy to the Aberdeen Standard Long Lease Property Fund, which was launched for the UK market 16 years ago and has assets under management in excess of £2.5bn.
The Fund aims to provide long-term, reliable, inflation-protected income streams with reduced volatility in capital values compared with a more conventional real estate fund. In our opinion this type of real estate has particularly defensive characteristics. The Fund will invest in assets with long leases and long-term tenants. Tenant credit underwriting is a crucial part of the investment process, and the team will be able to draw on the knowledge and experience ASI has in European equities and fixed income. The objective is to build a diversified portfolio of direct real estate assets located in key Western European markets (with a focus on Germany, France, Benelux and the Nordics). The Fund will not invest in the UK market.
The Fund will be managed by Troels Andersen, based in Denmark, supported by deputy fund managers Sabine Dost and Eeva Saravuo, located in Germany and Finland respectively. The fund management team will have at its disposal the resource and expertise of the wider ASI European real estate team, which has 11 offices across ten European countries.
Andy Creighton, Head of Continental European Real Estate, said:
“Long lease real estate has established itself as an important part of many institutional investors’ portfolios in the UK and we’re pleased to launch this Fund for institutions in continental Europe. Our knowledge and experience of long income real estate, along with the depth and breadth of our European real estate team, makes us ideally placed to manage this Fund and to provide more investors with access to a potential source of long-term, reliable income.”
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Notes to editors
- Aberdeen Standard Investments is a global asset manager dedicated to creating long-term value for our clients, and is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments. With over 1,000 investment professionals, we manage £525.7 billion (US$669.6 billion)* of assets worldwide. We have clients in c.80 countries supported by over 40 offices globally. This ensures we are close to our clients and the markets in which we invest. (*as of 30 June 2019)
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