US - State Street – via its Tuckerman division - has launched a European real estate index fund that is designed to replicate the EPRA real estate index. The fund has seed funding from Dutch pension insurance firm Optas Pensionen NV.
The Tuckerman Group, which is the real estate investment unit of State Street Global Alliance – in itself a subsidiary of State Street Global Advisors and Dutch pension fund ABP, said in a news release that it has launched the Balzac Real Estate Europe index fund.
State Street said the fund was initiated with a “capital commitment” from Optas, though it declined to disclose the amount.
It said the fund is designed to meet the needs of institutional investors and seeks to replicate the EPRA Liquid 40 property index, an index designed by the European Property Real Estate Association and Euronext.
The fund will allow investors to opt out of investing in UK real estate if they require.
“This new index fund will provide institutional investors with exposure to European real estate property companies through a single investment,” says Tuckerman’s chief executive Charles Lauckhardt.
Optas’ director of investments, Paul van den Heuvel, said the product is an efficient way to deal with the “specific risks” of the asset class in Europe.
US-based Tuckerman manages more than 801 million dollars in real estate assets.
The fund will invest indirectly in property, via property companies’ shares. State Street says indirect real estate has shown an “interestingly low correlation” to traditional asset classes such as bonds and equities.