Reuters- Property services firm CB Richard Ellis and derivatives specialist Reech AiM said on Tuesday they planned to launch a global series of 6 property hedge funds worth a total of 2.4 billion pounds ($4.79 billion).
The two groups said their joint venture had so far raised 100 million pounds for the first of these funds, the pan-European Iceberg Alternative Real Estate fund, which will invest in real estate securities including over-the-counter property derivatives, property shares, and offshore funds.
Christophe Reech, chief executive of Reech AiM, told Reuters the plan was to pursue trading strategies which enable investors to radically reallocate or ramp up their real estate holdings, rather than seek to exploit price anomalies between different types of property investment vehicles.
Other funds planned would offer different levels of risk or would vary real estate exposure by region or sector, tracking the emergence of property derivative markets in Asia and in the United States, Reech said, without giving a time frame.
Reech said the Iceberg fund tapped into growing investor interest in Britain’s pioneering property derivatives market which posted a record 2.9 billion pounds of trades in the first quarter, providing a template for similar but more embryonic markets in mainland Europe, Asia, and the United States.
“Iceberg is a pure alpha real estate fund and the first true hedge fund play offering an opportunity to invest in a new asset class,” he said. “The response to the derivatives application of real estate has been extremely positive and we expect the market to grow exponentially.”
