Hyundai Investment Management Completes Full Subscription of European Small and Mid-Sized Office Blind Fund

[Asia Economy Reporter Minji Lee] Hyundai Investment Asset Management has fully utilized the committed amount of its first overseas real estate blind fund by acquiring an office in Belgium as its final asset.

According to industry sources on the 24th, Hyundai Investment Asset Management recently completed the purchase of the City Garden office building located in Brussels, Belgium. The asset is situated in the Leopold Quarter of Brussels, a representative office district known as the European District, housing EU-related institutions, embassies, and government agencies. It is an area with abundant tenant demand due to the presence of global multinational corporations.

The asset was acquired by ‘Hyundai Investment Global Real Estate No.19,’ a blind fund established by Hyundai Investment Asset Management at the end of 2019. This fund follows a core-plus strategy investing in small to medium-sized office buildings in major Western European countries. Since its inception, the fund began its first investment in 2020 by executing a sale and leaseback transaction for the headquarters office building of RWE AG, Germany’s leading power company, and has now fully utilized its committed amount with the purchase of the Belgian office.

Since last year, overseas alternative investments have contracted due to travel restrictions caused by COVID-19, but competition for high-quality assets has intensified with the recovery of financial markets. A representative from Hyundai Investment Asset Management explained, “Unlike project funds where the investment target is decided first, followed by investor recruitment and local due diligence, this blind fund was set up according to the internal guidelines of investors. Therefore, after discovering suitable investment opportunities, we were able to make quick decisions and execute funds rapidly to complete the acquisition.”

This blind fund was established in partnership with La Francaise, a global integrated asset management company (AUM: €57bn as of the end of October 2021), with La Francaise acting as the local manager responsible for deal sourcing and asset management. La Francaise has previously successfully closed investments with Hyundai Investment Asset Management in the Saint-Denis office in France and the Brussels North office in Belgium.

Building on the success of its first overseas real estate blind fund, Hyundai Investment Asset Management is considering the establishment of a second fund. Given the necessity of securing funds in advance to minimize uncertainties in deal closures for acquiring competitive assets, the importance of blind funds is becoming more prominent.

Hansung Jo, CEO of Hyundai Investment Asset Management, stated, “Although the depletion of the fund’s committed amount was delayed compared to the original schedule due to COVID-19, we were able to acquire high-quality assets that are difficult to approach through project funds by leveraging the advantages of blind funds. Despite strong demand from domestic institutional investors for overseas real estate investments, project fund-type investments have been somewhat restricted due to limitations on business trips and local due diligence. As a result, demand for blind funds is increasing, and Hyundai Investment Asset Management will continue to introduce overseas real estate investment blind funds tailored to the needs of domestic institutional investors.”

This content was produced with the assistance of AI translation services.