Reech and CBRE launch property hedge funds
CB Richard Ellis, the Los Angeles property services firm, is linking up with investment boutique Reech AiM to launch a global series of six property hedge funds.
Together they plan to raise a total of £2.4 billion ($4.76 billion) across the six funds in the next 18 months.
So far they have raised £100 million of a £400 million target for the pan-European Iceberg Alternative Real Estate Fund, which will invest in real estate securities such as over-the-counter property derivatives, property shares and offshore funds.
The aim is to offer investors the ability to ramp up their real estate holdings, rather than looking for price anomalies between different types of property investment vehicles.
The relative value absolute return fund is aiming for returns of 15% above Libor.
"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," says Christophe Reech, chief executive. "The response to the derivatives application of real estate has been extremely positive and we expect the market to grow exponentially."
Reech says real estate hedge funds will provide new risk and return dimensions to traditional long-only physical property exposure. The new fund range is aimed at real estate and alternative investors.
Martin Samworth, managing director of CB Richard Ellis, says the real estate markets are growing in financial sophistication.