Investment manager UFG-LFP is launching its first pan-European real estate investment fund of funds in a bid to take advantage of a recovering property market across the continent.

UFG, which is 80%-controlled by Crédit Mutuel Nord Europe, said its UFG European Fund of Funds will be open for subscriptions until end of December 2011.

'For the coming years, the European real estate market represents a major investment opportunity thanks to the return of economic growth, an attractive valuation compared to the bond and equity markets and the current deleveraging in the industry,' UFG said in a statement on Monday.

The fund will have a core/core+ profile and will be targeting French institutional investors seeking to gain exposure to the wider property market. The vehicle will have a life term of 7-10 years and will be structured as a Sicav, aiming at returns of over 4%. UFG European Fund of Funds' ambition is to offer a total performance ranging between 7% and 10%.

UFG European Fund of Funds, with an initial capital of EUR 23 mln, is already finalising the acquisition of its seed portfolio comprising assets in Northern Europe, in particular in Scandinavia, UK, Germany and the Netherlands. The fund will also invest in France, Spain, Austria, Poland and Luxembourg.

UFG-LFP has already identified a dozen funds for investment this year, it said. The fund will target a 48% exposure to the office sector, while retail is planned to represent 35% of the total portfolio.