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Robeco to shut mortgages fund as investors shun structure

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Dutch asset manager Robeco is to cease marketing mortgage investments to institutional buyers after it became clear a separate manager was not necessary for the asset class.

Robeco and Vista Hypotheken, the Rabobank subsidiary that issued the mortgages, said potential investors didn’t need an asset manager separate from the mortgage issuer.

Last April, Robeco and Vista announced that they wanted to issue mortgages to buyers entering the housing market.

Under the arrangements, the Robeco Dutch Mortgages Fund (RDMF) would seek capital from pension funds and insurers, while Vista would issue the property loans.

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However, the two companies said last month that investors were more likely to be interested in a setup involving two separate parties, as an investment fund and a mortgages label under one roof could lead to conflicts of interest.

Robeco and Vista also assumed that they could assist future clients by also offering an investment strategy.

Robeco had previously said it would target loans with a relatively high loan-to-value ratio and fixed-rate periods of more than 20 years.

However, it has turned out that pension investors didn’t need asset management and mortgages provided by different entities.

Investors also preferred to decide on their investment strategy themselves, Robeco and Vista said, while directly fine-tuning investments with the mortgage issuer.

As pension investors weren’t interested in monitoring the issuer using an independent asset manager, and the RDMF had failed to find customers, Robeco said it had concluded that it no longer made sense to continue with the fund.

The €162bn asset manager is now seeking financiers who want to invest in Vista Hypotheken through a discretionary mandate.

In January, the €463bn asset manager APG committed €1bn to Vista, €500m of which was meant for sustainable mortgages.

These would offer consumers a 0.1% discount if their property had the highest energy efficiency rating, or would get it as a result of a renovation.

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