Asia-Pacific-Based Investors in Private Equity Real Estate Funds

by Gayatri Pillai

  • 04 Jul 2012
  • RE

Currently, 135 Asia-Pacific-based investors actively invest in private equity real estate funds. These investors collectively represent approximately $6tn in funds under management, of which over $150bn is allocated to the real estate asset class. Superannuation schemes comprise the majority of these investors, making up 39% of the total. Insurance companies and banks represent an additional 13% and 10% respectively, while asset managers make up another 7%. Together, private and public pension funds account for a further 9% of this investor group, with the remainder being comprised of various investor types including sovereign wealth funds, corporate investors, investment banks and wealth managers.

Australian institutions represent 45% of Asia-Pacific-based private equity real estate fund investors, followed by South Korea-based firms, which account for 19%. A further 11% are located in Japan, while Singapore- and India-based institutions each comprise 7% of the total. The majority of Asia-Pacific-based private equity real estate fund investors prefer to invest close to home, with 71% interested in Asia-focused vehicles. Fifty percent of these investors have an appetite for Australasia-focused funds, 40% for Europe-focused funds, and 40% for North America-focused funds. Additionally, 37% of Asia-Pacific-based private equity real estate fund investors favour funds with an emerging markets focus.

Private real estate funds employing opportunistic strategies are the most popular among Asia-Pacific-based investors, with 65% expressing a preference for these vehicles. Value-added and core-plus funds follow, with 56% and 48% of the investor pool interested in these vehicles. Thirty-seven percent of Asia-Pacific-based private equity real estate fund investors prefer debt funds, while distressed strategies are the least popular, with only 25% of these investors looking to commit to these funds.

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