Sectoral property fund
Altera Vastgoed N.V. is a sectoral property fund for pension funds, insurance companies and other qualifying professional investors. Since its inception in January 2000 with assets of € 750 million and four shareholders, the fund has grown to € 1.8 billion with 30 shareholders (as of 31 December 2015).
Altera Vastgoed’s mission is to serve institutional investors and offer them the opportunity to invest indirectly in Dutch property. As a sector-specific private property fund, not listed on the stock exchange, Altera manages three sector-specific portfolios within the framework of a single company. Via letter shares, shareholders are offered the opportunity to invest in residential, retail and industrial at their discretion.
Freedom of allocation and flexibility
Shareholders are free to determine how much they wish to invest in one or more of the sector portfolios. Altera Vastgoed does not offer an investment vehicle based on a specific mix of the various sectors.
Participants can also switch between the sector portfolios easily and efficiently, with full freedom of allocation over the four sectors. The unlimited duration and semi open-ended structure of the fund also ensure flexibility. Participants quarterly have the possibility of entry or redemption on the basis of net asset value without any fees being charged. An independent assessment of performance and a well-grounded analysis based on property valuation are essential in this regard. Accordingly, the portfolios are assessed each quarter by external valuation agencies.
Low risk profile and pure property performance characteristics
Altera Vastgoed is a so-called core fund with a minimum risk profile. Properties for investment are selected on the basis of explicit portfolio structures. External financing, i.e. leverage, as well as project development risks are excluded. Altera aims to ensure that it is fully invested.
As a so-called FBI (fiscal investment institution) – the equivalent of a REIT under Dutch law - the fund is exempt from paying corporate income tax. The direct investment returns are distributed in their entirety to the shareholders in the form of a dividend on a quarterly basis. This makes it possible to offer shareholders an investment vehicle that combines the benefits of indirect property investments with the risk/return characteristics of direct property investments.
Cost-efficient integrated management
The management organization of Altera Vastgoed is integrated with the portfolios within the NV (plc) corporate structure. In other words, the management is not part of a separate legal entity with its own earnings model based on the fees charged.
Also, Altera does not carry asset management activities for third parties (non-shareholders) and has no separate accounts. Accordingly, problems involving issues of priority and conflicts of interest are excluded. In short, there is a complete alignment of interest with the interests of the shareholders. A competitive cost level in line with market conditions has been agreed upon with the shareholders. Shareholders are given full insight into the budgets of the organization and the sector portfolios, in the progress being made with regard to implementation, and in the forecast for the current financial year. Organizational costs include costs of personnel, consultancy, supervision, valuation and office related matters.