ATP planning US real estate investment
DENMARK - The DKK371.5bn (€50bn) Danish supplementary pension scheme ATP is looking at real estate investments in the US.
"As for the US: we are just revising our investment strategy for the next three/four years and in that connection we have decided to start looking at the US market," said Michael Nielsen, managing director of ATP Real Estate.
"But we may have made our first investment in the US within the next year. The reason for our decision to enter the US is access to a bigger more mature market, more products and diversification."
He said the UK and France are the biggest countries in the portfolio, "having been some of the best performers in the past few years".
Nielsen, speaking in an interview with IPE Real Estate, added that the fund has decided not to invest in Asia.
"We have also been looking closely at the Asian market but have decided not to invest there. One of the more simple reasons is that is that we find it difficult to sit in Europe and be an active investor in Asia.
"Furthermore there are many differences between Asian markets: if you take Singapore and Japan and compare with China you find so many differences. So from a risk point of view we would prefer to go west than east. In the east there are just too many risks."
ATP's DKK11.4bn real estate portfolio returned 5.1% in the first half, as the fund overall returned 1.7%.
Nielsen also said ATP would increase the size of its real estate team as it increases its exposure to indirect real estate.
He also called on fund managers to be more transparent, although the situation has improved in the last five years due to INREV initiatives.
"But if the fund managers really want to sell their products to the institutions in future they really need to be more transparent. There is a way to go: for us it could a deal breaker with a fund manager if he is not transparent enough." He explained that ATP digs "very deeply" into fund managers' organisation.
The full interview appears in the September/October edition of IPE Real Estate.