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Asia-Pacific-Based Investors with a Preference for Value Added Private Equity Real Estate Funds

by Ee Fai Kam

  • 12 Sep 2012
  • RE

At present, there are 101 institutional investors operating in Asia-Pacific which have an investment preference for private equity real estate funds employing the value added strategy. Collectively, they have approximately $4.5tn in assets under management (AUM). The majority, 42% of this investor pool, are medium-sized institutions (AUM of $1bn to $10bn), while larger investors with assets under management of $10bn to $100bn make up 35%. Thirteen percent are firms with AUM of more than $100bn, while the remaining 10% are smaller institutions managing less than $1bn in total assets.

Australia-based firms make up the largest proportion (43%) of Asia-Pacific-based investors with a preference for value added private equity real estate funds. At 21%, China is the nation with the next highest number of value added private equity real estate fund investors, while South Korea-based investors make up 11% and Japan-based institutions occupy 8% of the investor pool, placing them in third and fourth place by number. The rest of the 101 investors are based in Singapore, India, Hong Kong, New Zealand, Malaysia, and Taiwan.

A breakdown of investor type shows that the majority (41%) of institutional investors based in Asia-Pacific open to value added private equity real estate vehicles are superannuation schemes. Twenty percent of the same investor pool is made up of corporate investors, 10% is comprised of insurance companies, while the remaining 29% includes asset managers, banks, pension funds, sovereign wealth funds, and investment companies.  

It is worth noting that the vast majority of the 101 investors in private equity funds employing the value added strategy have a preference for investing within the Asia-Pacific region; only 3% will not have exposure to vehicles with a geographical preference for Asia-Pacific. This home region preference indicates that these investors are likely more comfortable investing in value-added real estate strategies in territories where they have closer local knowledge and expertise.

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