International investment manager BlackRock Real Assets has completed the first close for BlackRock Europe Property Fund V (EFV) with $780 mln in commitments.
According to the firm, 24 public and private pension plans, sovereign wealth funds, financial institutions, insurance companies, endowments and family offices from North and South America, Europe, the Middle East and Asia Pacific contributed to a strong first close in excess of 50% of the fund’s total fundraising objective. EFV is targeting a total of $1.4 bn in commitments.
'The high level of interest for EFV is a result of the strong performance of EFIV. Our value-add strategies’ success is predicated on a principle-based approach and strong off-market sourcing capabilities,' said Thomas Mueller, managing director, BlackRock Real Assets and portfolio manager for the fund.
'We actively seek submarkets that are undergoing permanent structural change, predominantly in Germany, France, the Nordics, Ireland and Spain as well as selectively in the UK,' Mueller added.
EFV’s value-added strategy will largely be a continuation of the strategy implemented by its predecessor fund, Europe Property Fund IV (EFIV), BlackRock noted, capitalising on what the firm calls 'the persistently wide spread between core and non-core yields across Europe'. BlackRock said its strategy would continue to focus on 'creating stabilised assets through repositioning, rebuilding and recapitalising', with a focus on 'cyclically-resistent assets', rather than seeking 'higher yields in peripheral markets at the expense of liquidity'.
According to BlackRock’s 2019 global rebalancing survey, a significant portion of institutional investors intend to increase their exposure to alternatives to protect against possibility of the economic cycle turning.
About 51% of respondents intended to decrease their allocation to equities overall, while moving into illiquid alternatives such as real estate (40%). This continues a multi-year structural trend of clients reallocating risk in search of uncorrelated sources of return.