PGIM plans new core fund for Europe

PGIM Real Estate is the latest investment manager to plan the launch of a Europe-wide, open-end balanced fund.

The US-owned business is expected to join Morgan Stanley Real Estate Investing (MSREI) next year as rivals in the market with a new product for institutional investors investing in core/core-plus real estate.

They follow Barings Real Estate Advisors, TH Real Estate and AXA Investment Managers - Real Assets, which have all launched flagship funds in the last two-to-three years.

In Europe the market leaders in this sector in terms of gross asset value are funds managed by CBRE GI, Invesco Real Estate and M&G Real Estate. All three have grown rapidly in the last few years to around €4 bn each. Fees for such flagship funds are said to be between 0.5% and 1% of net asset value.

Most of these managers already have multi-billion evergreen funds in the US where they are benchmarked in the NCREIF Open-End Diversified Core Equity (ODCE) index.

Some, like Morgan Stanley, Invesco and M&G, also have Asian products. PGIM Real Estate declined to comment on a fund, but it did announce the hire of Thomas Kallenbrunnen of Helaba Invest as the new head for its European core diversified real estate strategy.

It is thought PGIM’s new fund will be seeded with European assets owned by parent Prudential Financial.

MSREI has poached Paddy Bingham, head of the team managing the Invesco Real Estate Europe Fund, to head up its new vehicle.


This story first appeared in EuroProperty, PropertyEU's sister publication


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