Chart of the Week: LP Strategy Preferences

 What fund strategies are the most popular in each region of the globe?  

 COW212-411 

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 At the end of 2013, PERE Research & Analytics had profiled over 2,300 LPs investing in private equity real estate funds. Using this comprehensive data, we were able to take a snapshot of the overall LP community in each region of the globe.

In North America, value-add strategies were most popular, with 46% of LPs having made a fund investment in the strategy. Core strategies were most popular in Europe and Asia-Pacific, suggesting that LPs in those regions had more conservative approaches to real estate investing.

However, in Asia, opportunistic strategies were also quite popular. The same was true for LPs located in Latin America, the Middle East and Africa. This is most likely a result of the many opportunistic funds that are managed by local GPs in the emerging markets. Although opportunistic funds have a higher association of risk, for emerging market based LPs, local knowledge can make investing in a locally based opportunistic fund a safer option.

A few of the larger, emerging-market focused, opportunistic funds currently on the road include: Aetos Capital Asia Fund V managed by Aetos Capital with a target of $1 billion, Pátria Real Estate III managed by Pátria Investimentos with a target of R$2 billion, and the Du Val Opportunity Fund managed by the Du Val Group with a target of $800 million.