Nordic Asset Manager NREP Raises $2.2 Billion in Real Estate Bet

Mortgage Banks And Residential Housing As Denmark Readies For Debt Refinancing

Photographer: Freya Ingrid Morales/Bloomberg

Nordic Real Estate Partners A/S, an alternative asset manager based in Copenhagen, has raised $2.2 billion for a new fund that will invest primarily in housing and care homes across Scandinavia.

NREP brought in a number of major pension funds, including New York State Common Retirement Fund, Los Angeles City Employees’ Retirement System (Lacers) and Denmark’s Industriens Pension, which oversees about $30 billion.

“In the current pandemic, Nordic real estate is attractive for global investors,” Chief Executive Officer Claus Mathisen said in an interview.

Mathisen says the region’s fabled welfare model, as well as its flexible labor market, make it stand out in a world struggling to handle the Covid crisis. According to the latest central bank estimates, Scandinavian economies will all contract less than 4% this year, compared with an 8% slump in the euro zone.

NREP is targeting returns

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New ETF Could Be Better Real Estate Bet

Despite low interest rates, a scenario that historically favors the group, real estate stocks and exchange-traded funds are struggling this year.

What Happened: Struggles hastened by the demise of brick-and-mortar stores and the work from home theme punishing commercial office space firms are among the factors weighing on old school real estate ETFs.

In other words, the time could be right for new approaches to the sector. Enter the Cambria Global Real Estate ETF (cboe:BLDG). The new global ETF is an actively managed fund that adheres to a quantitative, rules-based methodology.

Why It’s Important: BLDG “seeks income and capital appreciation by investing primarily in the securities of domestic and foreign companies principally engaged in the real estate sector and real-estate related industries that exhibit favorable multi-factor metrics, such as value, quality and momentum,” according to Cambria.

None of BLDG’s holdings exceed weights of 1.40%, so single stock risk is limited

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