Denmark’s largest private life insurer will be sending some of its crisp nordic krone over to Asia to invest in a new Asia Pacific real estate fund being set up by Morgan Stanley Real Estate Investing (MSREI).
According to accounts that have emerged in industry publications over the last few days, Copenhagen-based PFA Pension will be investing $200 million in Morgan Stanley’s Prime Asia fund to become the cornerstone investor in the new pan-Asia core investment vehicle.
Sources familiar with Morgan Stanley’s progress on the new fund indicate that the investment firm is close to closing on an initial tranche of $500 million in capitalisation for the open-ended fund.
Danes Attracted to Morgan Stanley’s Long Term Strategy
“This is a very long-term strategy targeting stable assets,” PFA’s head of real estate Michael Bruhn was quoted as saying in IPE Real Estate. Despite recent signs of economic headwinds in the region, Bruhn added that, “We are positive towards Asia in general and have invested there in the past.”
PFA expects the Morgan Stanley fund to return at least 8 percent on the Danish fund’s investment and said that it was particularly attracted to opportunities in South Korea, Japan and Australia.
In late 2014 Morgan Stanley was reported to be launching a new open-ended fund focusing on Asia Pacific. A published report indicated that the proposed $500 million to $1 billion core fund would be targetting assets in Australia, Japan, Shanghai and Beijing, with Hong Kong and Singapore also potentially getting some attention.
PFA declared a year ago that it would be stepping up its investment in real estate assets, with a target of committing 7.5 billion Danish krone ($1.1 billion) to property deals in 2015. The 100-year old company said at the time that it was focusing on opportunities in Asia, Germany and the UK.
In response to inquiries by Mingtiandi, representatives at Morgan Stanley declined to comment on reports regarding fund raising.