AXA Real Estate has launched an Italian fund for two AXA insurance companies.AXA Assicurazioni and AXA MPS have both committed to the new fund, which has an initial investment capacity of €350m and could invest up to €700m in European commercial real estate directly or through funds.The fund, although initially dedicated to the two insurance groups, could also attract investment from other AXA or non-AXA entities.AXA Assicurazioni, which currently has a portfolio of Italian real estate, is looking to increase its exposure to the asset class having sold properties in 2007 and 2008. AXA MPS, meanwhile, is new to the sector.The as-yet unnamed fund, which has a legal life of 20 years, is structured through an SGR (Societa Risparmio Gestione).Head of AXA funds, Laurent Lavergne, told IPE sister publication IP Real Estate that Italian regulation made it impossible for the two insurance companies to enter into a joint venture without going down the SGR route.The fund, he said, would look to diversify investment across all sectors in Italy, with the option of also investing abroad.Milan and Rome office properties, as well as retail in large Italian cities, would be considered by the fund, Lavergne said.“We expect offices and retail will be the dominant sectors for the fund, but we may look at other assets, such as hotels, logistics,” he said. “In some of Europe’s markets, there are too many people chasing the same assets, but that’s less the case in Italy, where we believe we can find the right returns.”The fund was launched at same time as a €44.5m acquisition was made in Milan.The U10 prime office building was sold to the fund by developer Brioschi Sviluppo Immobiliare.Lavergne said AXA would ideally look to invest in approximately 10 well-let assets in the €20m-35m range and did not rule out buying a portfolio for the fund, which has no defined investment period.He said: “We don’t want to compromise, but why not if it’s a good-quality portfolio? We need to be very selective. It’s an opportunistic approach, whereby we look for the right asset with the right risk/return profile.”AXA REIM SGR also manages the Caesar Fund and the Core Italian Properties Fund (CIPF), reserved for Italian institutional investors.CIPF is fully invested in Italian office, retail and logistics properties.