Asia-based Investors in Opportunistic Private Equity Real Estate Funds

by Ee Fai Kam

  • 03 Aug 2011
  • RE

Preqin’s Real Estate Online database profiles 40 institutional investors located in Asia with an investment preference for opportunistic private equity real estate funds. 28% are based in India, 18% are headquartered in Japan and 15% are located in South Korea. Singapore and Greater China each holds 13% of Asia’s investors with a focus on opportunistic funds. Other countries with investors interested in opportunistic markets include Malaysia, Pakistan and the Philippines.

Axis Bank is one such investor located in India. With assets under management exceeding USD 40 billion, the bank has an allocation of 5% to real estate. Its property portfolio consists of a mix of unlisted funds and direct investments. The Indian bank prefers to invest in residential, retail, commercial, hospitality, industrial and logistic properties within Asia and emerging economies.

One of the largest Asian investors is Japan’s Nomura Group with over USD 425 billion in assets under management. As a conglomerate, it has a variety of divisions and subsidiaries that help it gain exposure to the real estate asset class. Other than opportunistic funds, the investment company also commits to distressed and debt vehicles. Nomura Group has a geographical preference for European funds.

Another significant investor in opportunistic funds is China Investment Corporation (CIC). The USD 410 billion sovereign wealth fund has an allocation of 5% to real estate. CIC invests globally, in geographical areas such as Asia, Australia, Europe, North America and emerging markets. In 2010, it increased its exposure to the real estate asset class, especially in emerging economies. It remains optimistic about property investments in developed markets in 2011, and could increase allocation via real estate funds, secondary interests and direct investments.

South Korea’s National Pension Service has an allocation of 1.6% to real estate, which includes core, core-plus, value added, opportunistic, distressed and debt funds. The USD 305 billion pension fund has a target allocation of 2% to fulfill. It has a diversified geographical focus, investing in Asia, Europe, North America, Nordic economies and emerging markets. Other than private equity real estate funds, National Pension Service also gains exposure to the asset class via joint ventures and separate account mandates.

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