Schroder Property Investment Management has announced the launch of two new funds of funds to give institutional investors exposure to the European property markets
The first fund - European Fund I - will invest in unlisted property funds across Europe. The second fund - Continental European Fund I - will exclude the UK and will be aimed primarily at UK investors. Both funds will be closed-ended with fixed lives and domiciled in Luxembourg.
The size of each fund is to be restricted to €250m (£168.7m) and there will be a limited period for closing to minimise the length of the investment period and to avoid the later investors diluting the founding investors.
The global asset management company said the new funds will give institutional investors a diversified exposure to a portfolio containing some of the best European property funds, which will be selected from Schroders database of over 500 funds. The two funds will be advised by Schroders multi-manager team.
Neil Turner, Schroders head of international property investment and research, said: ‘The strong strategic case for European property plus the strength of our team has enabled us to secure in excess of €100m (£67.5m) of commitments for this product during pre-marketing.’
Schroders head of property distribution Mike Clarke, said: ‘We deliberately chose a closed ended structure as we felt open ended vehicles provided very limited liquidity at the expense of investment return and the interests of the long term holders. Instead we aim to operate a secondary market for units in the fund in the same way that we have pioneered for our UK fund range where we have traded over £1bn in the three years to December 2005.’
Schroders has £122.3bn under management in June this year and manages property funds with a total value of more than £7.2bn.