CB Richard Ellis Group and Reech AiM Group have formed a joint venture to set up property hedge funds with a UK and European focus. Launched successfully on May 12th, the Iceberg Alternative Real Estate is a relative value commercial real estate hedge fund.
With Goldman Sachs as prime broker, Iceberg Alternative Real Estate is aiming for a 12% volatility rate and a return equivalent to Libor plus 15%. Libor is the London Interbank Offered Rate, a benchmark for borrowing, currently at 5.3%.
The hedge fund has a minimum investment of £500,000 ($991K). With a 24 month lockup period, Iceberg has a 1.5% management fee and 15% in performance fees.
Iceberg is, "the first true hedge fund play offering an opportunity to invest in a new asset class," according to the hedge funds chairman Christopher Reech." Real-estate hedge funds are going to provide new risk and return dimensions to traditional physical property exposure.' Iceberg already has commitments for $240 million.
Martin Samworth, Managing Director of CB Richard Ellis, adds, “Our joint venture with Reech AiM and the launch of the Iceberg Fund are examples of the growing financial sophistication of the real estate markets and the opportunity that this represents for our business.
CB Richard Ellis Group, Inc. is a commercial real estate services firm with full-service operations in metropolitan areas worldwide. The Company offers a range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other commercial real estate assets.
Reech AiM Group is an investment management company, managing absolute return funds for institutions, high-net-worth individuals, charities, endowments and foundations, the company was created as a 'next generation' alternative investment management company to address today's hedge fund market challenges, the lack of liquidity and scalability.
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