INREV: Drop in investments by SWFs and pension funds

Sovereign wealth funds and pension funds globally reduced their investments in non-listed real estate vehicles in 2014 in comparison to previous years, according to a fund manager survey.

Sovereign wealth funds comprised 6.7 percent of the entire pool of institutional capital in terms of their fund activity last year, a significant drop from its 15 percent share in 2011. A similar fall in investment activity was also recorded by global pension funds, which represented 42.8 percent of all institutional investors, down from its 50.4 percent share in 2013.

These findings were released in the Fund Manager Survey 2015, conducted by the European Association for Investors in Real Estate Vehicles’ (INREV) in association with ANREV, its sister organization in Asia, and the National Council of Real Estate Investment Fiduciaries (NCREIF), capturing data from 164 respondents globally.

The subdued investment was compensated in part by increased investment activity by other institutional investors, notably private wealth and insurance companies. High net worth individuals and family offices combined comprised 7.5 percent of the pool last year, a jump from the 4.9 percent share in 2013. Similarly, insurance firms increased their share from 13.6 percent in 2013 to 14.4 percent last year.

While European institutional investors represented more than half of the global institutional capital invested in real estate vehicles, the survey indicated heightened investment activity by Asian investors, which represented 22.9 percent of the total invested capital in 2014, up from the 14.2 percent in 2013.

In the case of fund managers, the same names figured at the top of the survey as in previous years. With €103.8 billion of real estate assets under management, Brookfield Asset Management topped the list as the largest global fund manager, followed by The Blackstone Group, with real estate assets under management of €99.5 billion, and CBRE Global Investors with €74.5 billion.

For Asia, the Singapore-based real estate firm, CapitaLand secured the highest spot with real estate assets of €42.7 billion, far ahead of the next in the ranking; Fosun Property Holdings, the Shanghai-headquartered real estate investment firm, with €18.5 billion.