AXA REIM puts brakes on Asia investment

LONDON (Reuters) - Axa Real Estate Investment Management (AXAF.PA) has suspended its investment activities in Asia until the malaise affecting global property markets eases and there are signs of stability in the region, an Axa executive said.

Axa REIM, the property arm of French insurer Axa, has long harbored plans to expand into Asia, and, according to its website, had mulled "innovative" products for the region, such as fund-of-funds and real estate investment trusts.

However, Steve Smith, Axa REIM's head of transactions and asset management, said on Monday that those plans were now suspended.

"So, along with other markets, its been pretty well been locked down and that will change as opportunities emerge," he told Reuters in an interview.

"We are hopefully going to review things as the year goes on and then there might be opportunities, but for the time being we are just watching the market, watching clients."

Last year, Axa REIM named a new Asia chief, Frank Khoo, and said it had spent $2 billion in the region in the 18 months to September 2008. In Japan, it currently has funds under management of about 1 billion euros ($1.39 billion).

Smith said very little had been spent in Asia since last year because the client requirements had changed.

"We have got to get beyond this current malaise. There is absolutely no point in trying to raise capital there when the clients are inherently nervous," he said.

"So we (Axa REIM) need to see signs of stability, we need to see signs of improvement and that's the time to launch those products."

DUE DILLIGENCE OVERKILL

"We have to talk to the clients (in Asia) and we've got to wait to understand what their (risk) appetite is, and then that's the time to go back into that market," Smith said.

The global financial downturn had heightened investors' concerns about risk exposure risk, he said.

"What we've got now is the potential for overkill in risk assessment. That's no bad thing," Smith said, adding that Axa REIM's due diligence process was extensive.

"If it means spending more time on due diligence before making a decision and it keeps people happier and more comfortable with what we're doing, then obviously we'll look at it."

(Additional reporting by Cecilia Valente; editing by Karen Foster)

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