Preqin’s Real Estate Online currently tracks 191 institutional investors that hold a preference for Latin America-focused private real estate funds. These investors have a combined $770bn in assets under management and an average current allocation of 9.7% to real estate, below their average target allocation of 10.1%, which indicates potential capital flows to the asset class from these investors in the future.
As the chart above shows, pension funds make up the majority of investors targeting Latin America-focused funds, with the private wealth industry and foundations together constituting nearly a fifth of investors targeting the region. Geographically, the majority (54%) of investors targeting Latin-America focused private real estate are based in the US, which is home to a far larger proportion of real estate investors than Latin America itself (17%). Of those investors based in Latin America, Brazil has the highest number (18), followed by Mexico (6), Chile (3), Colombia (3) and Peru (3).
Foreign real estate investment would not be able to flourish without a commitment to an increasingly free economic environment with less state regulation. Investors are seeing progress in this respect, and a number intend to commit to private real estate funds focused on the region in the near future. General Board of Pension and Health Benefits, United Methodist Church intends to commit $50mn to Latin America-focused value added funds over the next year. Los Angeles County Employees' Retirement Association will also consider investment in Latin America over the next 12 months as it seeks real estate exposure outside the US.