Sweden pension provider, Alecta, has invested USD 780m in three US healthcare and life science real estate investments over the past 12 months.

The investments are part of USD 110bn assets under management (AUM) provider’s objective to increase its investments within real assets to 20 per cent of total AUM within a five-year period.

The investments have been made in three different structures, two of them together with Kayne Anderson and one with Blackstone, with a strong focus on the US market.

Commenting, Alecta real assets CIO, Axel Brändström, said: “Alecta continues to see many interesting opportunities in the US real estate markets across several property types. These investments are made with a long-term perspective and offer us scalability.”

Alecta is following a strategy which will see it increase its exposure towards sectors less sensitive to the general development of the economy and more driven by fundamental changes in society.

“The ageing population in the US is a factor and theme that we believe will create increased demand for certain types of real estate for many years ahead. Finding strong partners is essential in making this kind of investments successful and to deliver attractive risk-adjusted returns,” Alecta head of international real assets, Frans Heijbel, explained.

At the end of 2019, Alecta committed USD 230m in a joint venture agreement with Kayne Anderson/Remedy Medical Properties (formerly known as MBRE Healthcare) and Physicians Realty Trust. The investment was made in a Medical Office Building real estate portfolio, consisting of 271 000 sqm in 19 American states. Kayne Anderson will manage the joint venture together with Remedy Medical Properties.

The second investment was made in June 2020, which saw Alecta commit USD 250m to an additional co-invest (in KACORE JV LLC) together with Kayne Anderson/Remedy Medical Properties. This additional investment was made in a Medical Office/Senior Housing real estate portfolio, consisting of 140 000 sqm of Medical Office and 2032 units of the Senior Housing in 17 American states.

The final investment was made in November, when Alecta committed to a USD 300m investment in the fund Blackstone/BioMed Realty. BioMed is the largest unlisted life science real estate company in the world and is held through an open-ended fund structure. BioMed’s real estate portolio consists of 1,05 million sqm in Boston/Cambridge, San Francisco, San Diego, Seattle and Cambridge, UK. They are a global partner to many of the largest companies in life science.

“These investments will be managed by well-reputed firms with long and successful track-records managing this type of real estate. They are also living up to Alecta’s high ESG standards in line with our belief that long-term value is created through responsible and sustainable investments,” Heijbel added.

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