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Asia-Pacific Investors with an Interest in Private Real Estate Opportunistic Funds – April 2014

by Joyce Chee

  • 17 Apr 2014
  • RE

New research from Preqin has shown that there is a global surge in investor appetite for opportunistic real estate funds. This healthy appetite is apparent in Asia-Pacific-based investors, with 58% of institutions targeting opportunistic vehicles in the next 12 months. At present, Preqin tracks 146 Asia-Pacific investors with an interest in opportunistic private real estate funds. Collectively, this pool of investors manages $8.6tn in total assets, with an exposure of $187bn to the real estate asset class. 

Superannuation schemes exhibit a strong preference for opportunistic vehicles, accounting for 32% of Asia-Pacific institutions that are interested in this fund type. Interestingly, although opportunistic funds are riskier investments, corporate investors make up 16% of the investor pool. Seven percent of Asia-Pacific-based institutions are asset managers while banks, insurance companies and public pension funds each account for 6% of these institutional investors. Sovereign wealth funds and wealth managers each comprise 5% of Asia-Pacific investors that are interested in opportunistic funds. 

Australia-based investors have the strongest appetite for unlisted opportunistic vehicles, accounting for 37% of institutions based in Asia-Pacific. Investors in mainland China (18%) are second while Japan- and South Korea-based institutions make up 10% of the investor pool. This is closely followed by India-based investors which comprise 8% of the remaining investors with 7% of Singapore-based institutions favoring funds employing opportunistic strategies. 

In terms of geographic preferences, an overwhelming 96% of Asia-Pacific investors will invest in Asia-Pacific, indicating a strong home bias for the region. Within Asia-Pacific, 47% of institutions will target Australasia while 29% of the investor pool have a preference for Greater China-focused funds. This is not surprising as Australia- and China-based institutions make up the largest proportion of Asia-Pacific investors interested in opportunistic funds; these investors are also more inclined to invest in their domestic markets. North America is still deemed an attractive location with 47% of institutions favoring opportunities in the region. Forty-six percent of Asia-Pacific institutional investors will target European funds while 43% of the investor pool are open to investing on a global scale.  

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