Dutch PMT commits an additional EUR100m to the Barings European Core Property Fund
Following the recommendation of their fiduciary manager MN, Pensioenfonds voor Metaal en Techniek (PMT) is to commit an additional EUR100 million to the open end Barings European Core Property Fund (BECPF) as part of its European core real estate allocation, targeting a Q2 close.
In 2017, PMT was one of the cornerstone investors in BECPF, making a EUR150 million commitment. Over the course of 2017 the Fund attracted high volumes of capital from various institutional investors, with gross asset value now close to EUR1 billion. The target net return of the Fund is 7 to 9 per cent (after management fees), with a maximum loan to value of 30 per cent. Vacancy within the current portfolio is at less than 2 per cent and over the past 12 months the Fund has achieved a net return of 15.3 per cent (calculated in line with INREV guidelines).
The Fund owns various assets across the retail, logistics and office sectors in locations including Amsterdam, Berlin, Hamburg, Lille, London, Milan, Malmo and Madrid. Looking forward, the Manager has expressed an intention to increase exposure to residential, especially in high growth cities. They have also made an ambitious commitment to improve the Fund’s sustainability and associated GRESB ranking.
Since 2014 PMT has committed a total of EUR1.4 billion to European core real estate. PMT’s real estate investments include direct investments in the Netherlands, as well as indirect investments across Europe, with MN having responsibility for both of these investment strategies. Both PMT’s CIO Hartwig Liersch and MN’s Principal Portfolio Manager Jeroen Reijnoudt have expressed their satisfaction with the performance of Barings’ European Core Property Fund and the development of PMT’s core real estate portfolio.
According to Hartwig Liersch the PMT portfolio evolves according expectation, with a diversification over European countries, sectors and tier 1 managers. The system of add on investments, of which Barings ECPF is a good example, also increases the management efficiency for PMT and makes it possible to make use of the advantages of scale (on management fees and controls). Jeroen Reijnoudt stresses that the Barings funds has built a portfolio completely fitting the guidelines of what MN expects from a core a portfolio. The positioning and development of the portfolio is positive on aspects of income return, capital appreciation and sustainability. The gearing of the fund is prudent. The style of this fund, solidly based in core assets, with elements of “managing to core” and “build to core”, makes the fund stand out from the crowd.