Articles and data on the unlisted real estate market
Real Estate Spotlight - February 2011
Feb 08, 2011
Real Estate Spotlight is the monthly newsletter published by Preqin packed full of vital information and data, all based on our latest research into the private equity real estate industry. Real Estate Spotlight combines information from our online products Real Estate Online.
Real Estate Spotlight
February 2011 Volume 7 - Issue 2
Preqin Investor Outlook: Attitudes to Private Real Estate in 2011 As private equity real estate fundraising continues to flounder, Preqin conducted interviews with over 100 institutional investors to establish their investment plans for the coming 12 months. Will the market pick up in 2011? Find out inside... Page 2.
FEATURED PUBLICATION: The 2011 Preqin Private Equity Real Estate Employment and Compensation Review More information available at: www.preqin.com/recompensation
The 2011 Preqin Private Equity Real Estate Compensation and Employment Review
Fund Manager Spotlight: MENA-based fund managers including information on the funds raised historically and those currently on the road. Page 6. Conferences Spotlight: Details of forthcoming real estate events. Page 13.
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Investor Spotlight: Foundations that invest in private real estate funds and the investment preferences of such institutions. Page 8.
Investor News: All the latest news on private equity real estate investors. Including Novartis Pension Fund, National Pension Service and IBM UK Pension Plan. Page 14.
Fundraising Spotlight: Fundraising figures from 2011, including the five largest funds to close in the year Page 10.
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Investor Outlook: Private Real Estate in 2011
Preqin Investor Outlook: Attitudes towards Private Real Estate in 2011
Forena Akthar analyzes the results of the latest Preqin study of private real estate investors to find out what the next 12 months holds for the asset class.
Preqin undertook a series of extensive interviews with 107 private real estate investors in Q4 2010. Investors of varying size, type and geographic location were questioned to examine their intentions and attitudes towards investing in private real estate in 2011. Investor Activity in 2010 Fig. 1 shows that only 37% of the investors that participated in the study had made new private real estate fund commitments in 2010. This is lower than the figure from the study. Preqin conducted in Q4 2009, when 45% of investors surveyed had made new commitments in 2009, thus reflecting the downward trend in real estate fundraising. A number of factors have contributed to this prolonged fundraising drought. Investors feel that there is still uncertainty in the market and are concerned about the varying issues that remain. Performance of real estate portfolios has remained poor, failing to show the same levels of improvement as other asset classes. It has left investors reasoning that it may be too early to make sizeable investments in property and instead investors may focus on asset classes generating stronger returns. Another factor that may be influencing investors in their decisions to refrain not seeing distributions from previous investments. As a result, investors have not needed to make new fund investments in order to maintain their allocations to the asset class. Many institutions Preqin spoke with indicated that they have a number of unfunded commitments which they expect to fund in 2011. It is important to note that investor activity differed by location and size in 2010. Of the North American investors surveyed, 49% made real estate fund commitments while 51% did not. This relatively even split contrasts with the pattern observed in European investors, where only 31% were active in 2010. In terms of total assets, 29% of investors with assets of less than $1bn made private real estate fund commitments in 2010; this increased to 39% for those with assets of $1-10bn and 45% for those with $10bn or more in assets under management. Investor Activity in 2011 Of the investorsin the study, 45% stated that they are likely to commit to private
"45% of investors surveyed stated that they are likely to commit to private real estate funds in 2011"
from fund investments is the cash flow situation within their existing portfolios. In past years, with activity levels at a high, investors were continually having capital called up, and receiving capital back in the form of distributions. Therefore, it was necessary to constantly re-invest capital in new funds in order to maintain a stable allocation. In recent times, fund managers have been calling up committed capital at a slower pace, and with transaction levels low, investors are
Fig. 1: Proportion of Private Real Estate Investors That Committed to Funds in 2010
Fig. 2: Fig. 2: Investors' Intentions for Private Real Estate Investment in 2011 (Split by Investor Total Assets)
100% 5% 7% 3% 28% 53% Undecided Unlikely to Commit Likely to Commit
Proportion of Respondents
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Less than $1bn $1bn-10bn $10bn or More 33% 40% 69% 62%
real estate funds in 2011, while 49% are unlikely to invest and 6% are undecided. The state of the real estate market, the drop in property valuations and the poor performance of private equity real estate funds of recent vintages would have influenced the decisions of those that are not planning to invest. Private real estate activity in 2011 is also likely to differ by investor size and location. Fig. 2 demonstrates that the likelihood of investing in private funds in 2011 increases as the total assets of the investors increase. 33% of investors with total assets of less than $1bn are likely to invest in private funds in 2011; this increases to 40% for those with assets of $1-10bn and 69% for those with assets of $10bn and above. A significant 62% of investors with assets of less than $1bn will be inactive in private real estate in 2011. Smaller institutions, which typically make commitments less frequently, are more likely to halt private real estate allocations due to market conditions and reduced distributions. Fig. 3 shows that North American institutions are more likely to make new fund commitments in 2011, with 60% expecting to invest in 2011. Only 31% of European institutions surveyed made commitments in 2010, and 65% do not anticipate making new commitments in 2011. In addition to the factors influencing all institutions, this decline in activity of European investors also reflects the impact of a number of new investment regulations in the region. This includes the Solvency II legislation,
which will affect European insurance companies and certain asset managers.
Fig. 3: Investors' Intentions for Private Real Estate Investment in 2011 (Split by Investor Region)
100% 90% 80% 33%
70% 64% of the Undecided 65% 60% investors surveyed were 50% Unlikely to Commit below their 40% target allocations 30% 60% Likely to to real estate, Commit 20% while 28% were 30% 10% at their target 0% allocation and North America Europe 8% were above Source: Preqin their targets. Fig. 4 shows 3% expect their next commitment to that a higher proportion of investors be made in Q3 2011 and the remaining based in North America were below their 38% are unsure, or have not decided the targets compared to their European exact timing of their next commitment. counterparts. Investors are likely to This shows that many investors are still maintain their targets to real estate in being defensive in this market, waiting the long term but, unlike previous years, for the right opportunities to arise under-allocation to the asset class is no rather than being proactive and setting longer coercing investors into making timeframes for fund commitments. further commitments to real estate in the short term. Capital Outlay in 2011 Investors were asked to estimate the Timing of Next Fund Commitment number of fund commitments they will Investors that stated they are looking to make in 2011 and how much capital they make new fund commitments in 2011 expect to deploy. The majority stated were asked when they would make their that they will have an opportunistic next commitment. Fig. 5 shows 32% outlook and determine commitment sizes expect their first commitment of the year on a case-by-case basis. However, most to occur by the end of Q1 2011, and 27% investors were able to indicate how their expect to make their first commitment of capital outlay in 2011 would compare to 2011 in the second quarter. that in 2010.
Fig. 4: Investors' Current Real Estate Allocations Compared to Target Allocations (Split by Investor Region)
Fig. 5: Anticipated Timing of Next Private Real Estate Fund Commitment of Those Expecting to Invest in 2011
Proportion of Respondents
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% North America 71%
Investor Outlook: Private Real Estate in 2011
current real estate valuations. Another issue that investors consider to be of increasing importance in the private real estate market is the misalignment of interest between fund managers and investors. 18% of investors believe that the interests of fund managers and investors need to be better aligned. The level of leverage utilized by private real estate fund managers and prevailing debt financing issues were cited by 16% of investors, and 15% feel that transparency levels need to increase. Fund terms and conditions and the fees charged by real estate firms were of concern to 10% of investors surveyed, and 10% thought that the poor performance and returns generated by private real estate funds were key issues. 8% of investors stated there is a strategy-to-market fit discrepancy, reasoning that a significant proportion of funds in market are not well positioned to succeed in the current market. Investors thought that funds utilizing strategies which were suited to the current market were difficult to locate and the right opportunities were not readily available. Finally, 8% of investors are concerned about changing investment regulations. This includes the Solvency II legislation primarily affecting European insurance companies. Solvency II is a fundamental review of the capital adequacy regime for the European insurance industry, aiming to establish a revised set of
Download Data EU-wide capital requirements and risk management standards that will replace the current solvency requirements. A number of Europe-based insurers believe that this legislation will have an impact on their private real estate portfolios and compel them to make fewer fund commitments. Conclusion The survey reveals a number of important issues affecting the private real estate market, with the low proportion of respondents that have allocated to funds in 2010 underlining the extent to which uncertainty and caution is influencing investor appetite for new funds. There are, however, some encouraging signs. Although only 45% of all respondents are likely to commit to new vehicles in 2011, of those investors that committed in 2010 or expect to do so in 2011, 66% are intending to invest more in the current year than they did in 2010. The results also suggest that it is the larger investors, and those based in the US, that will be more active in 2011, and H1 2011 may see an increase in investor commitments. In order to be successful in the current fundraising market, it is necessary for fund managers to successfully convey how they intend to overcome market conditions, and why their strategy is well suited to achieve successful returns in the current investment climate.
Fig. 6 presents data relating to the responses of investors that had either made private real estate commitments in 2010 or are likely to invest in 2011. 66% of investors expect to commit more capital to real estate funds in 2011 than they did in 2010. A little over half of the investors in this group did not commit to real estate funds in 2010 but are hoping to resume investments in 2011. 14% of investors that had either made private real estate commitments in 2010 or are likely to invest in 2011 stated that they will commit the same amount of capital to private funds in 2011 as they had in 2010. These findings suggest that there may be an increase in the amount of capital entering the market in 2011, and that fundraising may therefore improve. The remaining 20% comprise those that invested in 2010 but do not expect to do so in 2011. Key Issues in Private Real Estate The results of this survey reflect the number of issues and concerns surrounding the private real estate market. Preqin therefore asked investors which issues they thought were of key concern to them. Fig. 7 shows that the economic climate and the resulting volatility in the real estate market was the most prevalent issue cited by investors, with 28% of those surveyed feeling apprehensive about the state of the market. 26% said that the illiquid nature of private real estate investments is an issue for them and 21% of investors are worried about
Fig. 6: Expected Capital Outlay to Private Real Estate in 2011 Compared to 2010 (of Those Active in Either of the Two Years)
Fig. 7: Investors' Perception of Key Issues in the Private Real Estate Market
2011 Preqin Global Alternatives Reports
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The 2011 Preqin Global Alternatives Reports are the most comprehensive reviews of the alternatives investment industry ever undertaken, and are a must have for anyone seeking to understand the latest developments in the private equity, real estate and infrastructure markets.
Key content includes: · · · · Interviews and articles from the most important people in the industry today; Detailed analysis on every aspect of the industry with a review of 2010, and predictions for the coming year; Comprehensive source of stats - including fundraising, performance, deals, GPs, secondaries, fund terms, investors, placement agents, advisors, law firms; Numerous reference guides for different aspects of the industry - Who is the biggest? Where are the centres of activity? How much has been raised? Where is the capital going? Who is investing? What are the biggest deals? What is the outlook for the industry?
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MENA Fund Managers
MENA Fund Managers
Farhaz Miah examines fundraising by MENA Fund Managers.
Fig. 1: Annual Fundraising by MENA-Based Fund Managers, 2005 - 2010
12 10 11
Fig. 2: Strategies Employed by MENA-Based Fund Managers, Funds Closed 2005 - 2010
70% 60% 58%
0% Core/Core-Plus Value Added Opportunistic Debt Distressed
Fig. 3: Funds on the Road Managed by MENA-Based Firms
7 6 5 4 3 2 1 0 1.6 6
Real Estate Online Preqin's industry-leading product Real Estate Online features detailed profiles on 45 MENA Fund Managers. For more information please visit:
No. Funds in Market
Aggregate Target ($bn)
Fig. 4: Largest MENA-Based Firms by Capital Raised for Private Equity Real Estate Funds in the Last 10 Years
Total Capital Raised for Private Equity Real Estate Funds in Last Ten Years ($mn) 468 405 385 375 370 300 250 202 200 200
Firm Kuwait Finance House SHUAA Partners Al Futtaim Investment Management (AFIM) Global Investment House Kuwait Financial Centre Real Estate Eastgate Capital Group Atlas Investment Group Actif Invest Amwal AREIT Management
Firm Location Kuwait United Arab Emirates United Arab Emirates Kuwait Kuwait United Arab Emirates Jordan Morocco Qatar United Arab Emirates
Many foundations allocate a significant proportion of their assets under management to private real estate funds, Clare Bowden examines the investment preferences of these institutions.
estate fund during 2010 and will consider making further commitments during 2011 should it identify suitable opportunities. Fig. 2 shows the private real estate allocation of foundations. 36% have allocations of less than $25 million. Over a half of foundations have an allocation of between $25 million and $249 million, while 13% allocate $250 million or more to the asset class. An example of such an investor is Church Commissioners for England, which has an allocation to real estate of £1.5 billion. The foundation invests in direct and listed real estate, as well as through private real estate funds. As show in Fig. 3, the majority of foundations (80%) are based in North America. Europe is home to 18% of foundations, and 2% are located in Asia and Rest of World, including Hong Kong Jockey Club and New Zealandbased Eastern & Central Community Trust. As can be seen in Fig. 4, foundations have a particular preference for vehicles with opportunistic, core and value added strategies. Children's Healthcare of Atlanta Foundation is an example of a foundation with a preference for opportunistic private real estate funds. It has a 10% allocation to real estate, which is split equally between REITs and opportunistic private equity real estate vehicles. Debt and distressed strategies are the next most popular with 30% and 28% of foundations having a preference for these investment types respectively. Funds of funds and core-plus are the strategies least favoured by this group of investors. As shown in Fig. 5, 91% of foundations use a real estate investment consultant while only 9% rely solely on in-house advice. As mentioned previously, many foundations are relatively small in terms of the amount of assets they manage, and so may not have the internal resources required to undertake fully the necessary investment search and analysis, and thus prefer to outsource some of the workload to an external firm. Key Facts: Average Allocation to Real Estate: $141mn (8.2% of Total Assets) Average Target Allocation to Real Estate: $197mn (9.1% of Total Assets)
Despite their smaller size when compared to other categories of investor, foundations are frequent investors in the real estate asset class and over 200 foundations that actively invest in real estate are listed on the Preqin database. Foundations are typically considerably smaller than many other institutional investors in terms of their assets under management. Fig.1 shows that of the foundations that invest in real estate, 35% have less than $250 million in assets under management and almost two-thirds have less than $1 billion in assets. 9% of foundations have $5 billion or more in assets under management. An example of a foundation of this size is W.K. Kellogg Foundation, which has total assets of $7 billion and a real estate allocation of 3%. The foundation committed to one private real
Fig. 1: Breakdown of Foundations by Assets under Management
Fig. 2: Breakdown of Foundations by Real Estate Allocation
Fig. 4: Real Estate Strategic Preferences of Foundations
Proportion of Foundations
70% 60% 50% 40% 30% 20% 10% 0%
28% 17% 16%
Fund of Funds
Fig. 5: Proportion of Foundations Using a Real Estate Investment Consultant
Real Estate Online The information in Investor Spotlight is taken from Preqin's Real Estate Online product. There are currently profiles for more than 200 foundations with an active interest in real estate. For more informationt, or to arrange a demo, please visit:
2010 Private Equity Real Estate Fundraising
Fundraising for private equity real estate funds is still slow, Andrew Herman looks at the activity that has taken place in 2010
2010 was another poor year for private equity real estate fundraising, as fund managers struggled to attract investor commitments. 90 funds reached a final close in 2010, raising an aggregate $37.2 billion, the lowest figure since 2003. Investors continued to display limited appetite for private equity real estate funds, forcing fund managers to delay interim and final closes, while additionally influencing a number of firms to abandon their fundraising plans altogether. Fundraising by Quarter Fig. 1 displays private equity real estate fundraising by quarter. The downturn in fundraising began in Q4 2008 and has continued thereafter. There were signs of a potential recovery in Q1 2010, when an aggregate $15.7 billion was raised, the highest total since Q4 2008. However, the final three quarters of 2010 were particularly poor, and this culminated in just $3.6 billion being raised in Q4 2010. Success in Achieving Fundraising Target The proportion of fund managers that meet, exceed or fall below their fundraising targets is a useful indicator to measure the level of success firms are Fig. 1: Quarterly Private Equity Real Estate Fundraising, having in garnering Q1 2008 - Q4 2010 commitments from 80 74 investors. Fig. 2 70 70 62 illustrates that just 60 54 over half of funds 46 50 closed in 2010 failed 42.7 42.3 40 33.5 35 to reach their initial 32 30 No. Funds 26 30 fundraising targets. Raised 22 23 20.5 19 15.6 Around 20% of 15.3 14.5 20 11.8 10.3 9 Aggregate 7.6 funds completed 10 3.6 Commitments fundraising having ($bn) 0 collected their target amounts, while just under 30% exceeded their initial fundraising Source: Preqin goals. Despite the poor levels of fundraising in 2010, Fundraising by Regional Focus fund managers have been more successful Fig. 3 displays 2010 private equity real estate in achieving their fundraising targets than fundraising by primary regional focus. 46 they were in 2009. 81% of funds failed to North America-focused funds reached a final reach their target size in 2009; notably more close in 2010, raising an aggregate $23.7 than the number that fell short in 2010. This billion. 24 Asia and Rest of World-focused reveals that fund managers are beginning funds received aggregate commitments of to grow accustomed to difficult fundraising $10 billion, and 20 European funds raised conditions and are now setting lower, more $3.5 billion. Although fundraising levels realistic fundraising targets. decreased across the market as a whole, the decline in capital raised by European funds was particularly noticeable. In 2009,
Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Fig. 2: Breakdown of Private Equity Real Estate Funds Closed in 2010 by Proportion of Target Size Achieved
Proportion of Funds
Fig. 3: Private Equity Real Estate Fundraising in 2010 by Fund Primary Geographic Focus
50 45 40 35 30 25 20 15 10 5 0 46
27% 21% 16% 13% 11% 13%
25% 20% 15% 10% 5% 0%
24 20 10.0 3.5
No. Funds Raised Aggregate Commitments ($bn)
North America Asia and Rest of World
Final Close Size as % of Target Size
PERE Fundraising in 2010
commitments than managers that are relatively unproven. Q4 2010 Fundraising Fundraising in Q4 2010 was exceptionally poor, even compared with the rest of 2010. 19 funds closed in the final quarter of the year, raising an aggregate $3.6 billion, equating to less than 10% of the total capital raised in 2010. Of the $3.6 billion raised, two-thirds of the capital was garnered by eight North America-focused funds. Five Asia and Rest of World funds gathered $1.0 billion, while European funds struggled to attract investor commitments, with just $0.2 billion being raised by four such funds. 64% of the capital raised in Q4 2010 was by firms located in the US; these firms closed eight funds, raising a combined $2.3 billion. Largest Funds to Close in Q4 2010 As shown in Fig. 6, the largest fund to close in Q4 2010 was Shorenstein Realty Investors Ten, which raised $1 billion. The fund seeks to generate attractive riskadjusted returns in the low-to-mid teens through investments in high-quality office properties throughout the US. Canadabased KingSett Capital raised C$450 million for KingSett Real Estate Growth IV. Other notable funds to reach final closes in Q4 2010 include Prime Finance Partners II and AMB Brazil Logistics Partners Fund I, which raised $440 million and BRL 720 million respectively.
these funds accounted for nearly a third of all capital raised, compared to less than 10% in 2010. 27% of the aggregate capital raised in 2010 was by Asia and Rest of Worldfocused funds, compared with 15% in 2009. This suggests that investors are becoming aware of the opportunities available in Asia and other emerging markets and are seeking to diversify their property portfolios through investments in these regions. It is important to note that many of the largest funds with a primary focus on investment in North America will also invest in other regions. Length of Time in Market The length of time funds spend on the road is another useful indicator of the level of investor appetite towards committing to private equity real estate funds. In 2006 and 2007, funds spent on average 9.3 months in market raising capital, as shown in Fig. 4. This increased to over 12 months in 2008, as the start of the economic crisis began to slow down the rate at which investors were committing to funds. In 2009 and 2010, increased investor caution created difficult fundraising conditions, leading to funds being on the road for longer periods of time. Funds that held a final close in 2010 spent on average 17.7 months in market, almost twice the length of time it took to close a fund in 2006 and 2007. Fund Manager Experience Fig. 5 shows that 62% of capital raised during 2010 was raised by firms which have raised eight funds or more. More experienced managers tend to raise larger funds than less experienced managers as with their previous track records it is possible for them to attract more investor
Real Estate Online The information in Fundraising Spotlight is taken from Preqin's Real Estate Online product. To find out more information about this product, or to arrange a demo, please visit:
Fig. 4: Average Time Taken for Funds to Achieve a Final Close, 2006 - 2010
Fig. 5: Breakdown of Private Equity Real Estate Funds Closed in 2010 by Manager Experience (Value of Funds Closed)
Strategy Value Added Opportunistic Debt Opportunistic Opportunistic
Focus US Canada US Brazil US
Fig.7: 10 Largest Private Equity Real Estate Funds Closed in 2010
Fund Real Estate Turnaround Consortium Morgan Stanley Real Estate Fund VII Global Fortress Credit Opportunities Fund II Beacon Capital Strategic Partners VI Starwood Global Opportunity Fund VIII TA Realty Associates IX Shorenstein Realty Investors Ten Starwood Capital Global Hospitality Fund II Fortress Japan Opportunity Fund Brockton Capital II
Firm Brookfield Asset Management Morgan Stanley Real Estate Fortress Investment Group Beacon Capital Partners Starwood Capital Group TA Associates Realty Shorenstein Properties Starwood Capital Group Fortress Investment Group Brockton Capital
Conferences Spotlight: Forthcoming Events
Real Estate Investment World Brasil 2011 Global Real Assets Investment Forum Green Building Asia 2011 Fund Management Regulation 2011 2nd Real Estate Mezzanine Finance Summit Real Estate Investor Summit: Dealmakers Conference 2nd Alternative Investments Summit 5th Real Estate Private Equity Summit Private Healthcare World Asia 2011
2 - 4 February 2011 8 - 9 February 2011 23 - 24 February 2011 30 - 31 March 2011 6 April 2011 13 - 15 April 2011 04 May 2011 18 May 2011 13 - 17 June 2011
Sao Paulo New York Singapore London New York Miami New York California Singapore
Terrapinn Institutional Investor IBC Conferences Infoline iGlobal Forum Opal Financial Group iGlobal Forum iGlobal Forum Terrapinn
Farhaz Miah takes a look at the latest real estate investor news.
Pensioenfonds Horeca & Catering to consider committing to private real estate funds during 2011 The EUR 3.6 billion private sector pension fund will consider committing to private real estate funds over the next 12 months if it identifies suitable opportunities. Pensioenfonds Horeca & Catering is at its 10% target allocation to the asset class and invests through listed real estate and private real estate funds. It has a preference for core vehicles with a domestic focus and did not make any private real estate fund commitments during 2010. Novartis Pension Fund considers committing to private real estate funds in 2011 The USD 17.6 billion private sector pension fund will commit to private real estate funds over the next 12 months if suitable opportunities are identified. Novartis Pension Fund has a 16% target allocation to real estate and a current allocation of 15.9%. It invests in the asset class solely through Switzerland-focused private real estate funds. The opportunistic investor has a preference for core vehicles and residential real estate. Novartis Pension Fund did not make any private real estate fund commitments during 2010. SPP Life Insurance to invest up to EUR 1.2 billion in real estate in next four years The SEK 83.3 billion insurance company envisages allocating between EUR 200 million and EUR 300 million to real estate per year over the next four years in order to reach its target allocation of 8-12%. Its investments in the next 12 months will be targeting direct real estate, and the insurance company thinks that it is unlikely to commit to private real estate funds during this period. However, it will not rule out fund commitments if an attractive opportunity arises. It feels that its future international real estate fund commitments will be orientated towards Asia in the long term as it is optimistic about the growth prospects of this region. As such, its focus on Europe will subside. IBM UK Pension Plan considers maiden allocation to private equity real estate funds The GBP 6.2 billion pension fund expects to invest in the real estate asset class in the next 12 months. It will do so on the basis of arising opportunities. Its real estate investment manager, CBRE, will determine the strategy and location focus of all its investments in the coming year. The pension fund has not invested in closed-end real estate funds in the past but it may gain exposure to such vehicles in the next 12 months. It is unsure about the timing of its first commitment as that will be decided by CBRE, but the pension fund will only invest in UK markets. IBM UK Pension Plan's 6% property allocation is currently split between direct holdings and property unit trusts (PUTs). National Pension Service seeks to expand its real estate portfolio with USD 1.2 billion war chest. National Pension Service (NPS) is seeking to commit approximately USD 1.2 billion to private equity real estate funds in 2011 and increase its allocation to real estate from 1.6% to 2%. The USD 280 billion pension fund prefers opportunistic and value added funds and will invest approximately USD 150 million per vehicle in up to eight such funds. It will commit up to 50% of its war chest to US-focused funds. While NPS has invested in core funds in the past, it is unlikely to do so in the next 12 months due to the large investment capital required and the lack of suitable core real estate opportunities. Its real estate activities in 2011 will also include direct investments in properties, especially those in developed markets such as London, New York and Australia. Societa Cattolica di Assicurazioni to commit EUR 192 million to Italy-focused private equity real estate funds in next 12 months The EUR 19.2 billion insurance company is looking to commit EUR 192 million to private equity real estate funds in the next 12 months in order to achieve its real estate target allocation. It currently has a 1% allocation to the asset class, below its 2% target allocation. It will seek to commit to Italy-focused funds across the fund strategy spectrum, and will look to achieve returns in excess of 6% per annum through these investments. The insurance company will decide upon the number of funds it will commit to and the timing of its first fund commitment in due course. Minnesota Mining and Manufacturing Company Pension Plan to commit to private real estate funds in 2011 The USD 11 billion private sector pension fund plans to commit to private real estate funds over the next 12 months. Minnesota Mining and Manufacturing Company Pension Plan is unsure as to the amount of capital it will commit or the timing of its next commitment but it is likely to target opportunistic vehicles. In terms of geography, it will predominantly target US-focused funds. The private sector pension fund has a 3% target allocation to real estate and an actual allocation of 1%. It invests in the asset class solely through private real estate funds.
Real Estate Online Each month Spotlight provides a selection of the recent news on institutional investors in real estate. More news and updates are available online for Real Estate Online subscribers. In the last month, Preqin analysts have added 94 new investors and updated 380 existing investor profiles. For more information, or to register for a demo, please visit: www.preqin.com/reo