We base the Global Investor 100 on the fair value of investors’ private real estate investment portfolios both through third-party managed investment vehicles and direct investments. This fair value is measured for all investors on December 31, 2021 to provide an apples-to-apples comparison. The ranking excludes investments in REIT or real estate company stocks as well as mortgages or mortgage-related securities. The ranking also excludes real assets, such as infrastructure or energy assets, and assets managed on behalf of third-party investors as can be the case with certain insurance companies.
Private real estate. The definition of private real estate, for the purposes of the Global Investor 100, is property used for commercial/business purposes, such as offices, hotels, retail, industrial and numerous other niche property types, as well as multifamily/apartment properties. It may include portfolios of single-family houses, assembled via an institutional platform.
Fair value of private real estate portfolio. The fair value of the investment portfolio covers capital definitively invested in real estate either directly or indirectly. In the case of direct investments, it means equity invested in a property or properties. In the case of indirect investments, it means equity invested via a private real estate investment vehicle operated with discretion by a third party such as a separate account, joint venture, commingled fund or other structured vehicle.
We count capital drawn down by the third-party manager for investment in real estate and not commitments made by the investor that are yet to be drawn down. We do not count capital allocated to but not committed to non-discretionary vehicles managed by third parties, such as open-end joint ventures whereby the discretion lies solely with the investor. In such cases, it is deemed that no capital has in fact been committed.
PERE’s Research & Analytics team corresponded directly with investors to confirm the total value of their private equity real estate investments as described above. In the absence of primary data, the team gathered information from secondary sources and sought to validate the researched figure with the investors themselves before publishing this ranking. We do not disclose which institutions have provided information on a primary basis.
What does not count?
• REITs and real estate company stocks. We consider these to be stock investments and part of an institution’s equity portfolio, regardless of how an individual institution may classify it.
• Individual single-family homes. These are rarely owned by institutional investors; more often they are owned by their occupier.
• Mortgages and mortgage-related securities. Similarly, we consider these to be fixed-income investments and representative of that portfolio.
• Structured debt. Again, these instruments, such as collateralized bond obligations and collateralized debt obligations, would be considered fixed-income investments and representative of that portfolio.
What does not count as ‘committed and/or invested capital’?
• Committed capital not yet drawn down.
We do not count capital that has been committed to a real estate fund but not yet drawn down by the fund manager.
• Expected commitments. No matter how confident an institution is about its investment goals and/or allocation, we do not count pending or future commitments and investments or the uncommitted portion of an institution’s target allocation.
• Opportunistic capital. An institution that has the ability to opportunistically invest in real estate deals as part of a larger allocation, but does not have a dedicated allocation or personnel for doing so, is not considered for the rankings. In other words, an institution that has the ability to invest $2 billion in alternatives will not be counted unless that capital has been segregated into a specific program for real estate and/or assigned a dedicated real estate professional that is actively scouting for investments.