‘Necessity is the mother of invention’ is one of the oldest and most contemporary proverbs. There is debate whether it was coined in Aesop’s Fables, by the philosopher Plato or by the academic Benjamin Jowett. There is no debating the need for invention in today’s private real estate capital market.

That rings true for both capital formation and deployment. The first half of the year saw the worst fundraising in a decade. According to PERE data, $72.3 billion was raised across 90 closed-end vehicles, the lowest aggregate amount closed since 2013, and also the smallest number of funds. On the deployment side, second quarter global volume was down 57 percent at $142 billion, as per research from CBRE. The broker forecast the year’s total to be down 34 percent compared with 2022.

Against this muted backdrop, private real estate managers and investors are thinking about ways to drive efficiencies to stay alive certainly, but also to thrive as the cycle turns positive. Engaging new practices and repositioning strategies to both keep current value resilient and take advantage of today’s secular and technological changes has led to increasingly numerous examples of innovation.

As such, when the editorial team discussed any category changes in this year’s PERE Global Awards we fast agreed the introduction of an award recognizing the best innovations in private real estate. The Innovation Investor of the Year category is the only newcomer this year but we envisage the award will provoke many submissions.

With this category, we intend to recognize innovations by firms over the last 12-month period. Entries should demonstrate new or unique approaches to improving investment decision-making or business operations through data and technology or a unique approach to capital formation or deployment. Review PERE’s submission guidelines here for more information on the category.

A recent example of innovation that could qualify is New Jersey-based manager PGIM Real Estate’s RealAssetX, a research and development laboratory aimed at developing technologies to “accelerate advancements in the real assets industry.” The firm will partner with leading universities to develop sustainable technologies, artificial intelligence or so-called ‘deep tech’ that can be adopted by real asset firms.

Another innovation that could qualify is Dutch pension manager APG, which incorporated large language models into its artificial intelligence technology in the first quarter of the year. This enabled everyone on the real estate team to engage with their ‘digital colleague’ Samuel for the first time, boosting their decision-making capabilities around existing and potential investments. You can read more about APG’s Samuel here.

A third example was the launch in May of Copenhagen-based Urban Partners, a cities-focused conglomerate, by the senior executives of real estate manager NREP, which subsequently repositioned as one of four businesses alongside a private equity firm, a real estate debt business and a technology venture business. The thesis at the heart of the transformation is the enhanced capacity “to address complex challenges facing cities”.

These examples are notably different types of innovation. But PERE’s brief for qualifying entries is deliberately broad so a wide and eclectic array of inventions can be considered. What unifies PGIM, APG and Urban Partners – as well as those that submit in the category – is they all would argue their innovations will address imperative needs, as the proverb goes.

Look out for who is nominated, among 67 other categories, when voting commences in December.