CB Richard Ellis and boutique derivatives specialist Reech AiM have launched a £100m property hedge fund. Financial Times
A London joint venture between CBRE and Reech launched the Iceberg Alternative Real Estate fund this month - the first in a planned range of six property hedge funds with a fundraising target of £2bn over the next 18 months. Iceberg launched with commitments for £100m of its £400m target.
'There’s an enormous appetite in the market for exposure to real estate as an asset class,' said Martin Samworth, UK managing director of CBRE.
CBRE is joining a growing property derivatives market, in which trades more than doubled in the first nine months of last year to £3.7bn. Sir Ronald Cohen, former co-founder of buy-out group Apax, and ORN Capital, a hedge fund backed by Morley, are preparing big property hedge funds of their own. Fortis, Sarasin and Kempen are also believed to be preparing launches.
Christophe Reech, chief executive of Reech AiM, said the property derivatives market was growing 'exponentially'.
'We believe that real estate hedge funds are going to provide new risk and return dimensions to traditional long-only physical property exposure,' he said. 'Instead of just buying the market, [investors] want a different kind of risk profile in their portfolio.'