AEW UK has lined up US giant The Townsend Group as the cornerstone investor for its first fund.
The business, which was established when the former Arbuthnot Banking Group property investment management team joined AEW Europe in January, has agreed terms with The Townsend Group to provide seed capital for its Core Property Fund.
The Ohio-based Townsend Group, which manages and advises on more than $100bn of investments, has underwritten the investment on behalf of an unnamed pension fund client.
A statement from AEW Europe said that this investment is the first core balanced fund investment in a much larger client strategy to gain exposure to UK real estate across the risk spectrum.
The AEW UK Core Property Fund, which is initially structured as a UK Exempt Unauthorised Property Unit Trust before migrating to PAIF, will invest across all of the main property sectors across the UK.
It will use an “innovative” new pricing mechanism in an effort to resolve the pricing and liquidity issues that have plagued open ended property funds.
A governance committee led by independent chairman, former senior investment partner at Hymans Robertson, George Henshilwood, will be used to protect the long term interests of investors.
Rob Wilkinson, chief investment officer at AEW Europe, said: “We are pleased to have secured this cornerstone investment from The Townsend Group for our AEW UK Core Property Fund.
“This launch is part of our series of open ended core funds alongside the AEW US Core Property Trust and the AEW Europe Core Income Fund.”
AEW UK managing director Richard Tanner said: “Timing is everything in property and this investment could not have come at a better time for a value manager.
“The market is starting to present interesting investment opportunities. The ability to create a portfolio from a blank sheet of paper, to handpick quality assets and buy them at today’s prices, gives us a clear advantage over existing pooled funds with legacy assets.”
Damien Smith, principal at The Townsend Group, said the decision was based on a number of “compelling features” including “alignment of interest of the management team, the quality and experience of the independent advisors to the fund and the teams’ historic track record”.
He said after analysing performance track records of a number of managers over historic periods of time which have had similar levels of uncertainty as we are seeing today AEW UK’s Core Property Fund was selected.
“The AEW UK team has firsthand experience in building high-performing portfolios in similar market conditions to what we are seeing today,” he said.
Wilkinson said: “This launch is part of our series of open ended core funds alongside the AEW US Core Property Trust and the AEW Europe Core Income Fund.”
bridget.o’connell@estatesgazette.com
