European asset managers are significant investors in the real estate asset class. The average allocation of those investing in real estate is currently €3.1 billion or, excluding those with a 100% allocation to the asset class, €2.7 billion (10.9% of total assets). The average target allocation is €5.6 billion and the average allocation to private real estate funds is over €1 billion.
Of the European asset managers that invest in real estate, 19% have total assets of less than €1 billion, while 35% of investors have total assets in the range €1 billion and €9.9 billion and the same percent have total assets of between €10 billion and €49.9 billion. 7% have total assets of between €50 billion and €99.9 billion, and 4% have total assets in excess of €100 billion. In terms of real estate allocation size, 48% of European asset managers have an overall allocation of under €1 billion, 33% have an allocation of between €1 billion and €4 billion, and 8% allocate between €4 billion and €10 billion. 11% have an allocation to the asset class of over €10 billion.
In terms of strategy, lower-risk core funds are the most targeted fund type, with 73% of European asset managers investing in such funds. This is closely followed by core-plus and opportunistic vehicles in which 64% and 61% of European asset managers invest respectively. Value added is also widely utilized with 55% of European asset managers investing in such funds. 27% and 36% of European asset managers have a preference for debt and distressed funds respectively.
With regard to location, all European asset managers invest in Europe, 65% invest in Asia and Rest of World and 60% invest in North America. 38% of European asset managers invest in first-time funds while 29% would consider doing so, and 4% invest in spin-offs. 29% are not willing to consider first-time funds.
The information in this blog is taken from Preqin’s Real Estate Online Product. There are currently profiles for 63 European asset managers with an active interest in real estate. For more information on private equity real estate funds, fundraising, fund managers and investors, see how Preqin’s Real Estate Online can assist you.