Hyundai Investments partners with La Francaise to create European office-focused fund

Seoul-based Hyundai Investments said Tuesday it has joined hands with French investment house La Francaise to create a blind pool fund that focuses on small and midsized office buildings in Western Europe.

The new fund seeks 8 percent internal rate of return through a 10-year investment, according to Hyundai Investments. The Korean vehicle did not disclose the fund’s volume and its limited partners committed to the fund. 

The fund will target core-plus commercial buildings in key cities of Germany, France, the Netherlands, Belgium, Luxembourg and Ireland, Hyundai Investments added. Part of the fund’s money will go for its acquisition deal to buy the headquarters of RWE in Essen, Germany, inked in December.

“Investors might face liquidity problems when selling off large office buildings in key Western European countries due to heated competition, whereas small and midsized office assets have lower price pressure and relatively higher liquidity on potential pool of new investors,” Kim Jae-kwang, managing director of Hyundai Investments in charge of alternative investment, said in a statement.

Hyundai Investments’ cross-border alternative assets under management are close to 2 trillion won ($1.7 billion), out of the total 14.8 trillion won as of Friday.

By Son Ji-hyoung (consnow@heraldcorp.com)