This month’s edition of Real Estate Spotlight revealed that value added funds make up the largest proportion of private real estate vehicles currently raising in the market, with 165 of such funds targeting an aggregate of $52bn. Considering the opportunities these unlisted vehicles present, which Asia-Pacific-based investors have an interest in such funds?
Preqin’s Real Estate Online service currently covers 127 investors with an interest in value added vehicles that are based in Asia-Pacific. Together, these institutional investors hold approximately $5.7tn in assets under management, with an allocation of $149bn to real estate. Of these 127 investors, 39% hail from Australasia while 22% are based in Greater China. South Korea-based investors constitute 12% of the investor pool, 11% are Japan-based while Singaporean institutions make up 9% of these investors.
Superannuation schemes make up 35% of Asia-Pacific investors with an interest in value added funds; these managers of superannuation benefits also constitute the largest (84%) proportion of Australia-headquartered institutions. Corporate investors are the second largest (17%) institutional type with an appetite for value added vehicles, while 11% of the Asia-Pacific investor pool are insurance companies. Banks, asset managers and pension funds each account for 6% of institutional investors located in Asia-Pacific. The rest of the institutional capital comes from investors such as sovereign wealth funds, investment companies, family offices, government agencies and wealth managers.
Thirty-two percent of Asia-Pacific investors with an interest in value added real estate funds will invest in first-time funds; of these, 58% will only commit to vehicles managed by spin-off teams. Eight percent of institutions will consider investing with first-time fund managers. A substantial 64% of the investor pool will co-invest alongside fund managers while 9% are open to co-investment opportunities.