Private real estate fundraising has demonstrated considerable growth in recent years. The results presented in the latest Preqin Investor Outlook: Alternative Assets, H2 2015 indicates that a large proportion of surveyed investors will continue to increase their exposure to the real estate asset class in the longer term (beyond 12 months). Preqin’s Fund Searches and Mandates tool on Real Estate Online details 293 investors that are planning to allocate capital to the asset class in the next 12 months.
The largest proportion of investors looking to commit to private real estate funds in the next 12 months are pension funds (31%), followed by insurance companies (13%), endowment plans (6%) and foundations (6%). Forty-eight percent of these investors are headquartered in North America, Europe-based institutions represent 31%, with the remaining 21% based in Asia and countries outside the aforementioned regions.
The chart above shows that North America-based investors have a preference for higher risk, opportunistic and value added private real estate vehicles, while Europe-, Asia- and Rest of World-based investors are more inclined to invest in a diverse range of strategies. Unsurprisingly, the majority of investors will target their domestic region for their private real estate investments over the course of the next year; 60% of North America-based investors are looking to commit capital locally, as are 71% of Europe-based investors and 50% of Asia-based investors.