JPMorgan Asset Management will be welcoming foreign investors for the first time in its flagship real estate fund, JP Morgan Strategic Property Fund, PERE has learned.

SPF has long reigned as the largest commingled real estate fund, with a current net asset value of approximately $33 billion and gross asset value of approximately $43 billion.

Dominant in the core real estate market, the vehicle easily dwarfs rivals in the NCREIF Fund Index – Open‐end Diversified Core Equity index, which includes 25 funds totaling $206.7 billion of net real estate assets and $247.9 billion of gross real estate assets.

For example, PGIM Real Estate’s PRISA I had a NAV of $19.7 billion and GAV of $24.5 billion as of December 31, according to an April presentation to the Bay County Employees’ Retirement System. Another, UBS Realty Investors’ UBS Trumbull Property Fund, considered a close competitor of SPF, reported a NAV of $19.2 billion and GAV of $23.5 billion as of March 31 in an April presentation to the City of Naples General, Police and Fire Pension Plans.

Now, SPF stands to become even larger, as JPMAM starts allowing foreign investors into the fund for the first time in the vehicle’s 20-year history.

The firm will begin accepting commitments from overseas institutions by mid-2019, according to one source familiar with the matter. Their actual inclusion may take longer. Because SPF is understood to have a queue of three to four quarters, the foreign investors may not actually become limited partners until 2020, another source said. JPMAM declined to comment.

In the meantime, a mass educating exercise is happening. Given the fact that the Strategic Property Fund has hundreds of investors, the bank platform has had to start updating existing investors of the change from three to six months ago, one source familiar with the matter said. “This has been years in the making for them,” the source said. Indeed, the firm began discussing the change with some investors as early as a couple of years ago, another source told PERE.

The vehicle counts many of the largest US public pension plans among its limited partners, including the New York State Common Retirement Fund, the California State Teachers’ Retirement System and Oregon State Treasury.

The New York-based asset manager launched the Strategic Property Fund in 1998, originally structured as an open-ended core vehicle to only include US investors.

But while it is one of the dominant property funds of its kind in the country, it has been among the last to open to foreign capital.

The majority of the funds in ODCE index either have already made the change to allow foreign investment or are later entrants to core real estate and consequently had always been structured to accept foreign capital for maximum flexibility, according to executives familiar with the funds.

In the case of SPF, “they never had any need to accept capital from foreign sources, but they don’t want to be completely shut out from that,” one person said. “A lot of the [foreign] investors have proactively reached out to them, and that is what has driven them to accept it.”