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Make-up of Investors in Real Estate Funds of Funds

by Forena Akthar

  • 13 Jun 2012
  • RE

Public pension funds account for 34% of all investors in real estate funds of funds. Foundations make up 25% and endowment plans represent 14% of the fund of funds investor universe. These two groups of investors are typically smaller in terms of total assets base, and many use funds of funds to acquire a diverse portfolio of funds through a single commitment.

Many private sector pension plans also make commitments to funds of funds, and such investors comprise 10% of the fund of funds investor universe. Five percent of fund of funds investors are insurance companies and a further 5% are superannuation schemes. Asset managers, family offices, and other investor types, such as banks, investment companies and sovereign wealth funds, are least likely to invest in fund of funds vehicles.

In terms of the location of investors that commit to funds of funds, almost 60% are based in North America. Investors from North America, particularly the US, are the most prominent investors in private real estate funds in general, and therefore it is unsurprising that these institutions account for such a large proportion of fund of funds investors. Thirty-five percent of investors that are interested in funds of funds are located in Europe and the remaining 8% are based in Asia and Rest of World.

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