Frankfurt-based fund manager Universal-Investment plans to enter the institutional property fund market and is targeting a 15% market share in the mid-term, representing some EUR 4.5 bn in German property special funds.

The company intends to launch the first funds by the autumn and has hired managing director Alexander Tannenbaum of Aberdeen Property Investors (API) to spearhead its efforts.

The 44-year-old executive previously headed API's real estate fund management business for institutional investors and has over 14 years of experience in the sector, having worked for Commerz Real and Credit Suisse Asset Management.

'The establishment of a real estate platform is the logical extension of our Master-KAG-offer for institutional investors, so that they can manage all major asset classes from a single source. Other potential clients are asset managers looking for a independent platform to realize customised property fund projects,' said Chief Executive Bernd Vorbeck.

He added: 'No other investment company can offer institutional investors the flexibility of asset classes and support offices in Germany and Luxembourg like Universal-Investment.’ The first funds are expected to be launched in the fall of 2011.

The launch is set to benefit from the possible implementation of the Solvency II regulations, which force pension funds and insurers to put aside 25% in equity for real estate investments, while this is not required for risk management.

According to Tannenbaum, the starting date is good, as institutional investors are expected to double the real estate portion of their total assets from 3-4% to 6-8% in the next few years.

Universal-Investment manages over EUR 130 bn in assets across 1,000 institutional and mutual fund mandates.