AXA Real Estate raises over $2.2 billion for latest co-mingled commercial real estate debt fund
$5.4 billion of commitments received and $7.2 billion invested into CRE and infrastructure debt in 2014
AXA Real Estate Investment Managers SGP, an affiliate of AXA Real Estate Investment Managers (“AXA Real Estate”), the leading real estate portfolio and asset managers in Europe[1], announces that it has raised over $2.2 billion at the first closing of its most recent pan-European real estate debt fund Commercial Real Estate Senior 9[2] (“CRE Senior 9” or the “Fund”). This fund raising, which follows shortly after AXA Real Estate was awarded a separate $362 million commercial real estate investment mandate from a Dutch insurance company, brings the total commitments received by AXA Real Estate for its debt platform in 2014 to $5.4 billion and takes the total platform to around $14.5 billion.
The Fund is AXA Real Estate’s fourth co-mingled real estate debt fund targeting European third-party institutional investors, and is seeking to raise $3.6 billion in total primarily from insurance companies and pension funds. The commitments for CRE Senior 9 were received from eleven institutional investors from the UK, the Netherlands, France and Switzerland, comprising nine third party clients and two AXA insurance companies. The nine third party investors comprise seven who had invested into AXA Real Estate’s debt platform previously and two new clients, underlining the continued interest in this asset class from both existing participants and new entrants.
This ongoing appetite for investment into loans led AXA Real Estate to innovate a new structure for CRE Senior 9 which allows capital to be recycled back into the Fund once loans have matured, thus allowing investors to retain their investment. In addition to this and in order to access demand from German investors, a specific feeder fund issuing rated notes has been set up, which will allow German regulated investors to participate in a further closing expected in Q1 2015. AXA Real Estate is targeting a final fund size of around $3.6 billion for CRE Senior 9, making it the largest European CRE senior loan Fund in the market.
AXA Real Estate invested $5.2 billion into commercial real estate debt during 2014, including its acquisition of a $1304 million share in a multi-billion Spanish loan portfolio disposed of by a major European bank, and an additional $2.03 billion into infrastructure debt during 2014. The CRE debt platform investments are currently predominantly diversified across four main territories being the UK (34%), France (29%), Spain (20%), and Germany (12%).
AXA Real Estate was the first non-banking player to enter the European real estate debt market in 2005 and, having raised $5.4 billion in 2014, including an investment mandate for a $703 million vehicle created by five Danish pension funds to invest in real estate debt for the first time, its platform now stands at $14.5 billion, of which $10.9 billion has already been invested. This confirms its position as the most advanced and largest of any real estate investment managers active in the CRE loans market in Europe.
Craig Hurt, AXA Investment Managers’ Director of Australia and New Zealand, commented: “At over $2.2 billion, the significant size of this latest tranche of commitments clearly demonstrates how Real Asset Finance has now become an accepted asset class with a specific allocation from most institutional investors. The point is further underlined by both the increased number of investors committing to this fund raise and the growth in the size of their allocations, as well as the fact that there was demand from our clients for a product which allowed capital to be recycled.
“Following on from the FSI recommendations and the ever increasing need for income generating strategies from Australia’s retirees, we are seeing increasing interest in this type of strategy. We expect that to continue in years to come.”
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