Asian and Australasian Investors in Value Added Private Equity Real Estate Funds

by Ee Fai Kam

  • 21 Dec 2011
  • RE

Preqin’s data reveals 71 investors in Asia and Australasia with a preference for value added real estate funds. Fifty-four percent of these investors are located in Australia, 11% are South Korea-based, 11% are Japanese institutions and 10% are based in India. The remaining investors are spread throughout China, Hong Kong, New Zealand and Singapore. Together, these 71 investors have more than USD 92 billion allocated to the real estate asset class and a combined USD 3.9 trillion in assets under management (AUM).

The largest Asian investor in value added funds is the Japan-based Norinchukin Bank. Established in 1923 as a quasi-governmental financial institution, Norinchukin Bank was privatized in 1959 and has branches in major financial cities such as New York, London and Singapore. The bank has a global real estate exposure, but has a particular preference for China-focused funds. Besides value added funds, it also invests in a wide variety of strategies such as core, core-plus, opportunistic, distressed and debt vehicles. An active investor, Norinchukin Bank is predominantly looking at funds investing in Asia, Australasia and Brazil going into 2012.

Samsung Life Insurance is another notable investor in the Far Eastern region. With assets under management of USD 127 billion, it allocates 4% to real estate investments. Samsung Life Insurance invests in core, core-plus and value added funds with a global outlook, which includes exposure to both domestic and regional markets, including China. The insurer invests in funds managed by affiliate Samsung Asset Management as well as third-party vehicles. Other than fund investments, Samsung Life Insurance also gains exposure to the asset class directly via separate account arrangements. In April 2011, the insurance company granted RREEF Real Estate a KRW 500 billion mandate to invest in the US and European markets.

One of the largest Australian institutional investors in value added funds is QSuper. The Queensland-based superannuation scheme has nearly USD 33 billion in total assets, with its real estate portfolio accounting for 5.5%. QSuper prefers funds that invest globally, including regions such as North America, West Europe and Australia. The superannuation scheme has previously invested in a domestic vehicle that allows it to gain access to shopping centres in Brisbane, Gold Coast and Toowoomba. Besides private equity real estate funds, QSuper also participates in listed property trusts and direct investments.

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