Midwest US-Based Investors Investing in Private Real Estate Funds – April 2015

by Justin Hall

  • 01 Apr 2015
  • RE

Preqin’s Real Estate Online service contains detailed profiles of 480 institutional investors based in the Midwest US currently committing capital to private real estate funds. These investors have aggregate assets under management of more than $4.6tn, and, on average, currently allocate 6% of total assets to real estate, below their average target allocation of 8%. 

Foundations and private pension funds represent the largest proportion of real estate investors based in this region, each accounting for 24%. Endowment plans represent 17% of investors, followed by public pension funds (16%). Six percent of these investors are insurance companies and 4% are family offices, while wealth managers make up 3%. The remaining 6% of LPs comprise asset managers, real estate fund of funds managers and other firm types. The largest proportion of these investors (24%) is located in Illinois, over half of which are based in the city of Chicago. Ohio and Michigan have the next largest proportions of investors located in the Midwest, with 15% and 14% respectively. 

The majority (61%) of investors based in the Midwest target the asset class solely through private real estate funds. Twenty-three percent will also target listed real estate, while 9% will invest in direct real estate alongside their private investments. Six percent of Midwest-based investors will consider all real estate investment types. 

Preqin’s Real Estate Online service also provides information on Midwest US-based investors looking to invest in private real estate over the next 12 months. Mayo Clinic, a $14bn foundation based in Minnesota, will commit up to $120mn to global private real estate funds in the next 12 months. Also looking to invest is Michigan Department of Treasury, a $60bn public pension fund, which will invest up to $500mn in private real estate funds within the next year. In general, Midwest US-based investors remain significantly under-allocated to the asset class and therefore will likely be investing further in private real estate for the foreseeable future.

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