M&G claims first real estate fund of its kind for Europe

BelgiumM&G Investments has raised €265 million for a continental European real estate “sale and leaseback” portfolio that includes properties in Belgium and Portugal. The firm says it is exporting an investment strategy from the UK and into Europe through the first fund of its kind. The M&G European Secured Property Income Fund is the “first” pooled institutional fund to invest in long-lease Continental European real estate. It is aimed at institutions. The fund uses a sale-and-leaseback technique, also known as “long lease” investing, where a company with operating assets unlocks the value of its real estate, usually as an alternative to bank financing, while securing its long-term occupancy. Alex Jeffrey, chief executive, M&G Real Estate, said: “Long lease property is an established asset class in the UK but is not as widespread in Continental Europe.” The fund’s immediate €130 million pipeline provides investors with a gross yield of 5.8% from leases to tenants, which are 100% linked to inflation with a weighted average term of 34.5 years. Its first investments, totaling €100 million, are in the leisure and retail sectors in Belgium and Portugal. Exchange on two further deals in Germany and Ireland is expected shortly and further opportunities are under review. ©2016 funds europe

Sponsored Profiles

SPONSORED FEATURE: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

INTERVIEW: Finding managers that can (and do)

Apr 18, 2017

Fabrice Kremer, a fund selector at Banque de Luxembourg Investments, has berated fundamental managers for failing to beat indices, but he remains committed to active funds. He speaks to Nick...

JERSEY INTERVIEW: ‘A steady sort of place’

Mar 21, 2017

The chief executive of Jersey Finance is keen to portray the island as a stable, trustworthy jurisdiction. He talks to George Mitton.

Roundtables

ROUNDTABLE: The issue is perception

Mar 21, 2017

Our panel discuss tax transparency, the elegance of private placement and why Jersey could do more to promote itself. Chaired by Tom Cowsill in Saint Helier.

ASSET SERVICING ROUNDTABLE: Under pressure

Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.