Allianz Real Estate has secured its first third-party client for its €3 billion Luxembourg-based debt fund. German pension fund Bayerische Versorgungskammer (BVK) will co-invest with a EUR300 million stake in a sub-fund valued in total at EUR1.2 billion alongside Allianz.
The fund will invest in the highest-quality real estate debt from prime borrowers, with senior core/core+ assets located in prime locations in tier European 1 cities.
The firm’s Luxembourg-based debt fund (PAREC) was launched in mid-2018 to simplify access to European debt investments for Allianz group insurance companies. At the end of 2019, the fund had close to EUR3 billion in assets.
It has quickly become a core element of the firm’s overall European debt portfolio, which was valued at EUR8.7 billion at the end of 2019, up 10% year-on-year, says Allianz Real Estate.
The PAREC fund offers a highly attractive, innovative structure for Solvency I regulated pension funds such as BVK as well as insurance investors regulated under the Solvency II regime.
Roland Fuchs, Head of European Real Estate Finance for Allianz Real Estate, commented: “Closing our first third-party fund in today’s market is testament to the investment approach that we employ at Allianz Real Estate. Our pan-European origination presence and in-house loan asset management team has enabled us to stay close to our borrowers through 2020’s unprecedented months and to remain open for new prime lending opportunities. A robust investment process alongside the sustainable quality of our portfolio, high underwriting standards and governance and our direct pan-European sourcing expertise have ensured a high level of confidence by both our borrowers and our clients: Allianz and now BVK.”
Reinhold Weger, Head of Fixed Income of BVK, said: “Allianz Real Estate has an exceptional, long-term track record in European debt and the fund represents an excellent opportunity to expand our exposure to quality assets through a co-investment structure. While the wider market has been disrupted by the COVID-19 pandemic, our perspective has always been on the long term, which we view as a core strength of the Allianz proposition.”
The latest loan to be included in Allianz Real Estate’s core debt fund was announced in April this year. The firm provided debt financing for an investment vehicle managed by GLL Real Estate Partners for the acquisition of the Bishop’s Square office asset in Dublin’s CBD. The asset is a grade A, six storey, newly extended and refurbished office building in the south of the CBD in the Irish capital.