ING Real Estate launches €1.2bn value-added fund

The Dutch institutional real estate manager is departing from its usual strategy to meet investor demands for diversification and higher returns.

ING Real Estate Investment Management, the Dutch institutional real estate manager, has closed its first value-added fund in continental Europe with €300 million ($398 million) of commitments.

The ING Real Estate Iberian Value Added Fund, focussed on the Spanish and Portuguese markets, set out to raise €250 million, but easily surpassed this target.

The move into value added funds by ING reflects the growing demand from investors to diversify from core and core-plus strategies to more opportunistic-style deals.

The seven-year fund is targeting a return of more than 13 percent and has a three year investment horizon.

Pieter Hendrikse, chief executive officer of ING Real Estate Management Europe, said in a statement: “This new fund initiates our first move towards our strategy of meeting investors’ demand for more value-added products in Europe. We are operating in a diverse marketplace which offers strong opportunities for value-added investing. Investors are increasingly looking to leverage structural and cyclical real estate opportunities to diversify their portfolio mix and to generate higher returns.”

José Antonio Martín-Borregón is managing the fund from ING’s Madrid office.