EUROPE - Internos Real Investors has raised €75m from four German pension funds and insurers for a core European hotel club-style Spezialfonds.

Internos, established in 2008 by Jos Short and Andrew Thornton, will manage the vehicle through its German KAG business and is targeting an investment volume of €250-300m.

Jochen Schaefer-Suren, partner and head of hotels and leisure at Internos, said he had structured the fund as a club deal because "the big lesson of the crisis is that institutions prefer to invest in assets they know with people they understand".

In some cases, the unnamed investors in the fund already knew each other personally, he said.

"Fund managers like me, who have been around for a while, have seen investors react against the modus operandi from five years ago, when fund managers would assemble in one fund structure investors from different countries, with different regulatory and accounting requirements," he said.

"Today, investors need to feel not only that it's a good investment but that the regulatory, legal and tax structures are familiar and that the other investors have the same objectives and time horizon."

Internos also announced it had already deployed 80% of the capital raised in a seed portfolio of four German and Dutch hotels worth €100m. All the transactions were off-market.

Discussions are underway to raise a further €50m-100m from German pension funds and insurers to acquire as many as five additional hotels within the next six months.

"From the outset, we agreed we would only raise capital from German investors with the same profile," said Schaefer-Suren. "This limits us, but it doesn't inhibit us from growing the fund."

Schaefer-Suren said the KAG license, which it took the fund manager a year to obtain, would allow it to launch other real estate fund products, including core income and retail funds.

It is the first real estate fund to be originated by Internos, which has so far concentrated on taking over the management of existing fund portfolios.

Schaefer-Suren described the move into fund origination as "very important for the business".