Alternative Investments: Alpha Real Capital Launches European Long Income Fund

November 27, 2019 | Fund Updates, News, Real Estate

Long income funds proved very resilient during the financial crisis. They still offer value in a different crisis – that of ultra-low or negative interest rates.

Low rates are a crisis all right for institutional investors such as pensions, endowments, insurance companies, and credit unions. And Europe is now again in negative territory. According to Alpha Real Capital, European long income property offers investors the opportunity for a significant yield differential over government and corporate bonds with comparable credit quality.

Long income property funds

Long income property is real estate let out on long leases from 15 – 200 years. These contracts generate secure, inflation-linked income-based returns that are relatively stable. They are also less sensitive to rising interest rates compared to liquid alternatives.

Institutional investors with long-term liabilities can channel funds into long income properties – these are a viable alternative source of long-dated secure income. These are especially sensible in an uncertain macroeconomic environment and offer useful portfolio diversification.

European long income property

“The Eurozone has a large pool of freehold, owner-operated (over 69%), high quality, income-generating assets,” says Alpha Real. These are ideal as Long Income Property.

Alpha Real’s European Long Income Fund (ELIF) will invest in commercial ground rounds, amortizing income strips, and long-lease property. The fund will target the needs of institutional investors.

It will look for euro-denominated, asset-backed, and secure inflation-linked income streams. The fund will focus on the Eurozone, especially Germany, Ireland, and the Netherlands.

Hugo James, partner and head of long income, Alpha Real, described long income property as “an attractive asset class.” European pension funds and insurers will appreciate the secure income streams from these assets. “Especially when nominal yields in northern Europe are likely to rule at close to zero or negative for the long term.”

[Related Story: The Top Market for European Real Estate Investment Is… ]

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

December 6, 2019

SIFMA: US Economy Will Expand in 2020 But at a Moderate Pace

SIFMA: US Economy Will Expand in 2020 But at a Moderate Pace
Shape

Latest Alternative Investment News

Steve Cohen Looks to Boost Stake As MLB Team Owner
December 7, 2019     Hedge Funds, Latest News, News

As uber-rich private equity and hedge fund billionaires are homing in on sports franchises, Steve Cohen is negotiating to up his current 8% stake in the Mets to 80%. Cohen…

LPL Wades Into Pricing Wars; Axes Platform Fees on ETFs for Advisors
December 6, 2019     News

LPL Financial launched a no-transaction-fee, ETF network where advisors can trade ETF’s for free in their advisory accounts. LPL Financial partnered with three leading ETF providers – State Street Global…

Goldman’s Private Equity Clients All Fear a Recession
December 6, 2019     News, Private Equity

Goldman Sachs clients are hunkering down for a recession, but are still looking for multi-billion dollar investment opportunities. Speaking on a Bloomberg interview, Alison Mass, Goldman Sachs Group Inc.’s chairman…

SIFMA: US Economy Will Expand in 2020 But at a Moderate Pace
December 6, 2019     Headlines, Special Reports

SIFMA’s bi-annual survey compiles economic focus from its Roundtable members, the chief US economists of over 20 global and regional financial institutions. SIFMA’s 2019 End-Year US Economic Survey forecasts US…