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Alternative investments

Vestas Investment launches $272 mn Europe logistics fund

By Nov 27, 2020 (Gmt+09:00)

2 Min read

                                            (Courtesy of DSV)
                                            (Courtesy of DSV)

South Korea’s boutique asset manager Vestas Investment Management Co. has pooled 300 billion won ($272 million) from four pension and retirement funds in the country to launch a Europe-focused logistics fund, according to sources involved in the fundraising on Nov. 27.

The blind pool fund targets an 8% annual internal rate of return from investing in logistics centers in 10 European countries, including its recent acquisition of a 180 billion won facility in the Netherlands, leased to DSV, a Denmark-based logistics company. Nine other target countries are the UK, Germany, France, Belgium, Sweden, Denmark, Finland, Poland and Spain.

Considering the debt financing to be used, it is expected to acquire logistics facilities for a combined 600 billion-700 billion won. It was first reported by the Maeil Business Newspaper and confirmed by sources.

Its first investment is in a logistics facility located in Tholen, the Netherlands, with a floor space of 113,589 square meters. Constructed last month, it is in a 10-year lease agreement with DSV. Vestas financed the deal with 74 billion won from the fund and the remainder from borrowings.

For the purchase, Vestas teamed up with UK real estate agency and consulting company Savills Investment Management. Both companies also contributed their own money to the logistics fund, equivalent to about 5% of the fundraising.

With the fund launch, Vestas became the first Korean boutique investment firm that raised a blind pool fund for overseas investments. Until now, Mirae Asset Global Investments Co. and Samsung SRA Asset Management Co. have been the only Korean asset managers to launch overseas logistics investment funds.

In comparison, many other Korean asset managers set up investment vehicles to arrange Korean asset owners' investments into global funds.

Founded in 2010, Vestas is the biggest Korean investor in European logistics centers with a portfolio of eight logistics facilities in Europe, in which it has invested 1.3 trillion won as of August this year. It manages 7 trillion won in assets.

The report came after South Korea’s Hana Alternative Asset Management Co. has decided to exit from two Amazon-leased logistics centers in Poland for around 240 billion won ($217 million), reaping over 10% in an average internal rate of return.

Europe’s e-commerce market is projected to grow by 30% over the next four years to 454 billion euros by 2024, according to Germany’s research firm Statista.

Write to Seon-Pyo Hong at rickey@hankyung.com
Yeonhee Kim edited this article.
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