Axa Investment Managers has launched the Axa WF Global Flexible Property Fund to provide exposure to the long-term return opportunities of direct property investment.
According to Axa IM, the fund provides daily liquidity, reduced volatility, improved diversification and lower transaction costs compared with direct real estate investments.
The fund invests in listed equity and debt instruments from a global universe of publicly-traded real estate companies.
Targeting an allocation of 60% equity to 40% debt, the fund is designed to mimic the liability side of a real estate company's balance sheet. This, said Axa IM, "enables the fund manager to seek a return profile similar to that of a direct real estate investment."
The manager has the flexibility to change the asset allocation mix of the fund and reduce or increase equity exposure according to the property cycle, with the aim of reducing overall volatility.
The team managing the fund is made up of professionals from both Axa IM and its subsidiary, Axa Real Estate, Europe's largest real estate portfolio and asset manager.
"Mixing real estate equity and debt instruments in one liquid strategy is a relatively recent investment opportunity," said Frédéric Tempel, global head of listed real estate at Axa IM and lead manager on the fund. "Property holds a lot of appeal as an asset class with strong historical performance and resilient income."
But, he added, "Investors have previously had to choose between illiquid physical real estate, and liquid yet often volatile real estate equities."
He also noted that the disintermediation of banks following the global financial crisis has created a much deeper market for real estate debt.
The fund, will be diversified across its asset allocation of equity and debt, geographic regions (Americas, Europe and Asia Pacific) and real estate sub-sectors.
The Fund is a Luxembourg-domiciled SICAV (open-ended investment company).
Separately, Axa Real Estate is reported to be preparing to pay between €220m ($247m) and €230m to buy the Elisenhof building in Munich from US developer and investor Tishman Speyer.