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Asia-Based Investors with a Preference for Opportunistic Private Equity Real Estate Funds

by Ee Fai Kam

  • 18 Jul 2012
  • PE
  • RE

There are 46 Asia-based institutional investors interested in private equity real estate funds employing the opportunistic strategy. In terms of geographical location, 22% of these investors are headquartered in Japan, 22% are based in South Korea, 20% are Indian firms and 13% are located in Singapore.  The remainder come from other Asian countries such as China, Malaysia, and the Philippines.

The majority of Asia-based investors in opportunistic private equity real estate funds are insurance companies, making up 17% of investors. Corporate investors form the next most significant group, representing 15% of the pool. Banks account for a further 11%, while public pension funds and sovereign wealth funds each make up 9% of the 46 investors. The remaining institutions include asset managers, wealth managers, and investment banks.

Almost all (96%) Asia-based investors in opportunistic private equity real estate funds have a geographic preference for opportunities targeting Asian properties. Less than half (49%) will consider committing to opportunistic private equity real estate funds investing in North America, while 47% have a preference for similar opportunities in Europe.

In addition to opportunistic private equity real estate funds, these 46 investors also gain exposure to the property asset class via other fund types. Sixty-one percent have a preference for value added funds, 52% are interested in core vehicles, and half of this investor pool will commit to private equity real estate funds utilizing the distressed strategy. 48% are also attracted to debt opportunities. The least popular strategy is core-plus funds, with only 39% of these investors indicating they will invest in such vehicles.

One significant investor in opportunistic private equity real estate funds is China Investment Corporation, a sovereign wealth fund which manages approximately $460bn in foreign reserves for the Chinese government. Singapore-based Great Eastern Life Assurance is another investor in opportunistic private equity real estate vehicles. The insurer is responsible for $45bn in assets under management, and has previously committed to Ascendas China Commercial Fund, a value added vehicle targeting grade A commercial towers in Shanghai and Beijing.

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