Preqin currently tracks 264 investors that actively pursue or consider investing in first-time private real estate funds. The average target allocation of these investors is around 11.3%, with an average current allocation of 13.7%.
Fifty six percent of investors that pursue or consider first-time fund commitments are based in North America, with around 35% located in Europe. Asia-based investors account for 5% and investors from the remaining regions, such as South America and Australasia, account for 4%.
Of the investors that invest in, or consider first-time funds, 80% have a general preference for value added and opportunistic vehicles. Sixty-five percent of investors view core funds as attractive, while core-plus and debt vehicles are preferred by 52% of institutions that target first-time funds. Distressed funds are preferred by 47% of investors, while 15% consider the fund of funds route. Secondaries are the least preferred strategy with this investor group, with only 11% of investors that consider first-time funds demonstrating a preference for this avenue.
In terms of geographic preference, 72% of investors that invest in, or consider first-time funds primarily demonstrate a general preference for North America. This is closely followed by Europe, with 71% of investors in first-time funds indicating a preference for this region, while 57% of investors consider Asia as an investment destination for private real estate capital. Forty-eight percent of investors consider funds globally, while funds targeting regions and economies outside of North America, Europe and Asia are on the radar of 29% of investors that commit to or consider first-time funds.