Global real estate assets overseen by fund managers had a gross value of €2 trillion ($2.9 trillion) in 2015, according to the INREV-ANREV-NCREIF Fund Manager Survey 2016. That’s 10 percent more than the €1.8 trillion recorded the year before. Toronto-based Brookfield Asset Management held onto its first-place ranking last year, followed by New York’s The Blackstone Group. The survey, which received responses from 154 fund managers in North America, Europe and Asia, found that the top 10 investors held about 40 percent of total real estate assets under management.
Global value of real estate assets under management grows to €2 trillion
6 June 2016, Amsterdam – Fund managers across North America, Europe and Asia Pacific were collectively responsible for real estate assets worth €2 trillion (gross) in 2015, according to the INREV/ANREV/NCREIF Fund Manager Survey 2016. This total is more than 10% higher than the €1.8 trillion total recorded in 2014.
The survey shows that the ‘urge to merge’ is alive and well in the industry, with one in five fund managers saying they have been involved in M&A activity over the last 10 years. The result of this trend towards consolidation is that the biggest fund managers have been getting even bigger. Taken together, the top ten fund managers were responsible for around 40% of the total assets under management (AUM).
The most prominent example of this is TIAA’s acquisition of TH Real Estate, helping to propel the combined company into third place in the 2015 ranking. CBRE Global Investors dropped one place to fourth, while Brookfield Asset Management and The Blackstone Group kept their first and second place positions respectively from last year. The average AUM for the four largest managers stood at over €100 billion. UBS Asset Management, AXA Investment Managers – Real Assets, JP Morgan Asset Management, Invesco Real Estate, Pramerica Real Estate Investors and LaSalle Investment Managers complete the top ten.
Henri Vuong, INREV’s Director of Research and Market Information, commented: ‘These results show that the non-listed real estate market remains buoyant. Very few of the participating fund managers saw a significant drop compared to 2014, while at the top end both Brookfield and Blackstone are between 50% and 100% larger than they were three years ago.’
In terms of how investors are choosing to access the market, it is clear that funds are still a hot favourite. Non-listed funds and private REITs account around half the total of AUM, and institutional investors make up over 80% of that allocation.
Once again, pension funds were the dominant institutional investor type, with the insurance sector the second biggest player. The survey data suggests that sovereign wealth funds are becoming more active in non-listed real estate. Sovereign wealth funds were the second largest investors in joint ventures and club deals by proportion of AUM (20.7%).
Vuong concluded: ‘Investors are increasingly looking for global exposure and this has been a key driver of acquisitions as fund managers look to bring in more local market expertise. Industry consolidation continues apace and there is nothing to suggest there will be a slowdown in M&A activity in the near future. Whatever the ‘optimum’ size for a fund manager might be, we clearly haven’t reached that point yet.’
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Notes to Editors
About the Fund Manager Survey 2016
The ANREV / INREV / NCREIF Fund Manager Survey 2016 explores total real estate assets under management (AUM) of all real estate fund management companies, providing greater insights into regional composition and vehicle types. In total, 154 fund managers globally completed the questionnaire. Collectively, respondents represent €2.0 trillion of real estate assets under management. All figures in the report are quoted as at 31 December 2015 unless otherwise stated.
INREV, the European Association for Investors in Non-listed Real Estate Vehicles, was launched in May 2003 to act for investors and other participants in the growing non-listed real estate vehicles sector. The non-profit association is based in Amsterdam, the Netherlands. INREV aims to create a forum for the sector and increase the transparency and accessibility of non-listed vehicles, to promote professionalism and clarify best practice and to share and spread knowledge. INREV currently has 384 members drawn from leading institutional investors, fund managers, banks and advisors across Europe and elsewhere. In 2015, 40 new members joined INREV. For further information, please visit http://www.inrev.org/
ANREV is the Asian Association for Investors in Non-listed Real Estate Vehicles, a not-for-profit organisation based in Hong Kong. ANREV’s agenda is driven by the members, in particular the investors, and is focused on improving transparency and accessibility of market information, promoting professionalism and best practices, sharing and spreading knowledge. Fund managers, investment banks, lawyers and other advisors provide support in addressing key issues facing the Asian non-listed private equity real estate fund markets.
ANREV is a sister organisation to INREV in Europe and works with a number of associations across Asia Pacific and North America on research and professional standards. http://www.anrev.org
Based in Chicago, Illinois, the National Council of Real Estate Investment Fiduciaries (NCREIF) is an association of institutional real estate professionals who share a common interest in their industry.
They are investment managers, plan sponsors, academicians, consultants, appraisers, CPAs and other service providers who have a significant involvement in institutional estate investments. They come together to address vital industry issues and to promote research.
NCREIF produces several quarterly indices that show real estate performance returns using data submitted to us by their Data Contributing Members. https://www.ncreif.org/
Photo courtesy of Brookfield Asset Management