Preqin’s Real Estate Online service currently tracks 106 institutional investors located in Canada currently investing in private real estate funds. These investors have aggregate assets under management of more than $1.7tn and, on average, allocate approximately 9% of their total assets to real estate, below their average target allocation of 10%.
In terms of strategy, over half of these investors will target lower-risk opportunities in core real estate funds. Contrastingly, 31% and 28% of Canada-based investors will target higher risk value added and opportunistic strategies respectively. One example of a Canada-based investor committing capital to private real estate funds in the next 12 months is Alberta Teachers’ Retirement Fund, which will commit up to $400mn to real assets funds, a portion of which includes private equity real estate funds. The public pension fund will consider all real estate fund strategies on a global basis, including co-investment opportunities, joint ventures, separate account structures and first-time real estate fund managers.
Preqin’s Real Estate Online also tracks 50 real estate fund managers based in Canada, the majority of which can be found in Toronto. In the last 10 years these managers have collectively raised more than $23bn in capital commitments. Interestingly, fund managers choose to implement strategies that match Canada-based investors’ preferences, with 54% of fund managers in the country utilizing core strategies. Value added and opportunistic strategies are employed by 50% and 46% of the fund manager population respectively.
By a large margin, Brookfield Asset Management has raised the most capital for private real estate funds of any Canada-based manager in the last 10 years ($18.6bn). The Toronto-based real estate firm is currently looking to raise $7bn in institutional capital for Brookfield Strategic Real Estate Partners II, an opportunistic vehicle investing in commercial properties and real estate operating companies globally. If successful, the fund will be the second largest real estate fund raised in 2015, behind Blackstone Real Estate Partners VIII.