This is the second year that PERE’s ranking of the world’s leading investors has hit the 50-player mark, and what stands out above all else is stability, particularly in the top 30, with many of the same names featuring as in 2017. The world’s largest pools of capital have increased their commitments again in 2018 at $991 billion, compared with $896 billion a year ago. The commitment of the leading 30 investors has also increased from $719 billion in 2017 to $794 billion.
Our Global Investor 50 is based on the market value of investors’ private real estate investment portfolios both through third-party managed investment vehicles and direct property investments. A full methodology – and the entire ranking itself – can be found here.
Now, we kick off our countdown…
50
MPK Migros Pensionskasse
$7.661 billion
HQ: Schlieren, Switzerland
The cut off for inclusion in PERE’s top 50 global investors has increased by half a billion dollars this year, with the Swiss MPK Migros Pensionskasse just making it.
In its second year on the list, the $23.7 billion public pension fund has one of the highest allocations to real estate at 31.3 percent, totaling $7.3 billion, and currently invests about $200 million per annum. In the past year, MPK has also made waves by rolling out ESG standards for all external managers, which seems to be paying off with a 9 percent return on its assets in the past year.
49
BT Pension Scheme
$7.675 billion
HQ: London, UK
In keeping its real estate portfolio relatively stable, the London-based pension fund slipped four slots this year. In the midst of a 13-year recovery plan to pull out of a $14 billion deficit, the $67.8 billion fund has committed to de-risking its portfolio over time, with the BT Group pledged to commit £4.5 billion ($5.9 billion; €5.1 billion) by 2020.
BT also sold 60 percent of its stake in investment manager Hermes Fund Managers, (originally BT’s in-house asset manager) in April, retaining a 30 percent stake. With new chief executive Morten Nilsson appointed in October, it is unclear what this will mean for BT’s real estate investments going forward.
48
New York City Retirement System
$7.777 billion
HQ: New York, US
An amalgamation of five New York public pension funds, the $194 billion NYC Retirement System returns for its second year on PERE’s Global 50.
The various funds under its umbrella were searching for some small-cap investment managers for some smaller portfolios earlier this year, and in June the System’s CIO of four years left, launching an ongoing search for a replacement. But in the past year, the System made a $450 million investment in affordable housing, and has committed to seeking partnerships with early-stage and first-time funds for investment going forward.
47
Korea Investment Corporation
$7.778 billion
HQ: Seoul, South Korea
The Seoul-based sovereign wealth fund makes a strong debut this year with an impressive $7.78 billion portfolio in real assets. This is part of the fund’s larger drive to increase its assets under management to $200 billion by 2020 – an ambitious goal from its current $134 billion portfolio.
As the South Korean fund searches for a new president (with IMF director Choi Hee Nam as the favored nominee), KIC is also seeking to increase its allocation to alternative assets to 19 percent in the next two years, up from its current 14.4 percent.
46
Hong Kong Monentary Authority
$7.9 billion
HQ: Hong Kong
Making an impressive debut on the Global Investor 50, the Hong Kong Monetary Authority has also been enjoying quite high returns on its private equity and real estate investments thanks to the recent volatility of the market.
Although concerned about the ongoing trade war between the US and China, the government banking authority remains committed to working with “experienced and trusted partners” to grow its portfolio. The sovereign wealth fund also reshuffled its management in the past year, but remains focused on the Asia-Pacific market for now.
45
American International Group
$8.64 billion
HQ: New York, US
Making an impressive jump from the number 50 slot last year, the insurance company’s real estate holdings increased by $1.45 billion in the past 12 months.While the numbers indicate AIG remains committed to real estate and long-term strategies despite facing larger problems of revenue and liabilities, the New York-based AIG has simultaneously been relatively quiet on its specific commitments this year.
It might be cooling its momentum for the coming year, as in April the investor was seeking to sell a portfolio of private markets fund stakes worth as much as $2.3 billion.
44
North Carolina State Treasury
$8.69 billion
HQ: Raleigh, US
It has been a busy year for the North Carolina public pension fund. Although sliding down three slots from last year, its real estate holdings increased from $8.01 billion to $8.69 billion, specifically through investments like its $200 million commitment to the Landmark Real Estate Partners VIII Co-Investment funds, and a $250 million commitment to the Landmark Real Assets Fund II.
According to the fund’s quarterly report, real estate is one of the few assets making above its 7 percent target return. However, the pension fund is still looking to decrease its management fees as part of a plan to reduce its $15 billion unfunded liability.
43
New York State Teachers’ Retirement System
$9.07 billion
HQ: Albany, US
Although the $115.5 billion public pension fund decreased its holdings in real estate from its $11.25 billion last year, NYSTRS has been far from idle. Committing $200 million to Blackstone’s second Asia fund in November 2017 and an additional $150 million to the Cabot Industrial Core Fund II, the New York pension appears to be diversifying out of its primary focus on opportunistic/value-added funds – the Cabot investment marked NYSTRS first investment in core real estate funds since 2015. At this rate, the pension, the second largest in the state of New York, might just surpass its previous $11.25 billion by the end of 2018.
42
Legal and General Investment Management
$9.6 billion
HQ: London, UK
One of the few entrants on our list this year whose real assets decreased overall, the London-based Legal and General has spent the past 12 months re-orienting its focus around social value and contribution toward communities where its investments sit.
In February, the £951.1 billion ($1.2 trillion; €1 trillion) pension fund committed to giving 20 percent of its portfolio a ‘Social Value Score’ in the next four years, and making that publicly available. It has simultaneously made some high-profile deals, including the £46.95 million acquisition of Birmingham’s Broadway Plaza.
41
Oregon State Treasury
$9.76 billion
HQ: Salem, US
Treasury for 12 years
Although the state public employee’s pension slipped a few spots compared with last year, it increased its real estate holdings by just under $1 billion in the same time frame. This past year has been one of restructuring: it committed to hiring 27 new investment staff last August, and has already recruited one, just before terminating a North America debt-focused separate account with Talmage. But that did not signal retreat for the $102 billion retirement fund, which followed up with $550 million in commitments to various western Europe and global-focused real estate vehicles.
40
Munich Re/MEAG
$10.11 billion
HQ: Munich, Germany
of its biggest overseas investments in the US capital this year
Munich Re makes its debut in the ranking this year. Asset manager MEAG handles €251 billion of investments on behalf of the German reinsurer and its primary insurance arm, ERGO, including a 4 percent allocation to real estate. The investor focuses on core property with most of its existing holdings located in the main German and western European cities.
Recent acquisitions in the German market have focused on the high-street retail, residential and logistics segments, while in January 2018 Munich Re closed one of its biggest overseas deals by purchasing the Washington Building, an office asset in Washington DC, for around $250 million.
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