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Asia-Pacific-Based Private Real Estate Fund Investors with a Preference for Emerging Markets

by Ee Fai Kam

  • 20 Jun 2012
  • RE

Preqin’s Real Estate Online shows that there are 110 private real estate fund investors in Asia-Pacific which have a preference for investing in emerging markets. These investor are all known to have an active interest in investing in one or more emerging markets, including the Far East, Greater China, the Middle East and Africa. Collectively, these 110 institutions manage a combined pool of capital worth approximately USD 3.8 trillion, with more than USD 133 billion allocated to the real estate asset class alone. These Asia-Pacific-based investors have an aggregate allocation of approximately USD 15 billion to private real estate funds.

Australian firms account for the greatest proportion of Asia-Pacific unlisted real estate fund investors with an appetite for emerging markets. They make up 26% of such investors. South Korean-based LPs account for a further 25% and Japanese institutions 16%.

A number of high profile investors in private real estate are located within the region and have an active appetite for the sector. With assets under management (AUM) of USD 72 billion, Australian sovereign wealth fund Future Fund is one such investor in private real estate funds. Future Fund has 6% of total assets allocated to the real estate asset class and considers investing in most private real estate fund types. In addition to its emerging markets investments, Future Fund also seeks exposure to North America, Europe, developed Asia and Australasia.

One of the largest South Korean investors in private real estate funds is Woori Bank; it has assets under management of approximately USD 200 billion. Woori Bank invests in Asian and South Korean private real estate funds, having previously invested in funds of a wide variety of types, including core, opportunistic and debt vehicles. The bank is a flexible investor, and its investments are often directed by changes in the global economy. In addition to its private fund investments, Woori Bank also gains access to the real estate asset class via direct investments and listed funds.

Chinese asset manager Hwabao Trust is one of the 110 Asia-Pacific-based investors in private real estate funds. It has previously committed to a RMB-denominated vehicle managed by Tishman Speyer and acted as a cornerstone investor in the partnership. Hwabao Trust invests exclusively in its domestic market and is interested in a range of private real estate fund strategies. The asset manager is a financial services subsidiary of Baosteel Group, a Shanghai-based manufacturer of steel and iron-related products.

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