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Real Estate Investor Fund Searches and Mandates – November 2013

by Jack Jackson

  • 28 Nov 2013
  • RE

Data compiled from Preqin’s Fund Searches and Mandates feature shows that of all investors actively looking to invest in private real estate in the next 12 months, 26% are public pension funds, and 16% are private sector pension funds. Endowment plans and foundations make up 13% and 11% of investors respectively, and 7% of actively searching investors are insurance companies. Asset managers, family offices, superannuation schemes and wealth managers make up the rest of the investors looking to commit to private real estate in the coming year.

The most common strategies investors are looking to commit to in the next 12 months are core and value added funds, each being targeted by 48% of investors. This is quite a contrast to October 2012, when 57% of investors were targeting core funds, and 46% were focused on value added strategies, showing that investor appetite for lower risk/return profile funds may be decreasing. Opportunistic strategies are being targeted by 40% of investors, whilst 24% are targeting core-plus vehicles in the coming year. There has been a significant decrease in the number of investors targeting debt and distressed strategies in the next 12 months. Thirteen percent of investors are targeting debt focused funds, compared to 22% in October 2012, and just 11% are targeting distressed vehicles, down from 18% last year.

Geographically, North America is the most favoured region being targeted by private real estate fund investors in the next 12 months. Fifty-seven percent of investors are currently targeting North America, up from 50% last year. Europe is being targeted by just 27% of investors in the next 12 months, a significant decrease from the 40% in October 2012. There has also been a decrease in the appetite for Asia-focused funds, with only 23% of investors actively targeting the region, compared to 30% last year. There has been an increase in investors are looking to invest in global real estate funds in the next 12 months, with 34% of active investors targeting these funds for their next private real estate fund investment. This is an increase from the 30% targeting global funds in October 2012.

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