Dutch merchant bank Kempen & Co has launched a €40m mutual fund that will invest in European property stocks.
The Orange European Property Fund, which was listed on the Euronext Amsterdam exchange on 26 October, is expected to produce a total return to shareholders of around 14% a year.
OEPF will invest in about 40 companies, and will take a “bottom-up” approach to stock selection, picking companies based on individual merits rather than a strategic allocation to certain countries or sectors.
Kempen & Co already has some €350m of clients’ money invested in property stocks, and runs a number of funds, including the €39m Orange International Property Fund.
The benchmark index for the OEPF is derived from the Global Property Research 250 index. It consists of 75 property companies, with French stocks making up 28.5% of the benchmark index, UK stocks fixed at 20%, Dutch shares at 19.5%, Swedish companies at 13%, and Spanish companies at 6.8%. The rest of the index is spread among other European countries. The fund’s objective is to outperform the benchmark by 1% to 2% a year.
Eric Kramer, investor relations manager at Kempen & Co, said he expected OEPF to grow to around €70m to €80m by early 2001.
The fund managers expected to invest in some property-related companies not included in the GPR benchmark index, he added.
This could include hotel companies, development companies, brokerages and companies which are presently too small to be in the index.
