What is in the Database?
PERE’s Database holds live information on active institutional investors in the private real estate asset class, managers of private real estate funds and/or non-fund vehicles with fund-like economics, service providers to both investors and fund managers (investment consultants and placement agents), as well as data on the funds themselves through their fundraising life-cycle.
What do we mean by private real estate?
For the purposes of the Database, private real estate is defined as capital raised through limited partnership structures, co-investment funds, separate accounts, private mandates and other similar investment vehicles for the dedicated purpose of investing in the acquisition, financing, and/or ownership of property.
By this, we mean 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.
Our definition of private real estate does not include:
- Publicly traded REITs and real estate company stocks: these are considered to be stock investments and part of an institution’s equity portfolio
- Mortgages or mortgage-related securities: these are considered to be fixed-income investments
- Private equity
- Structured debt: these instruments, such as collateralized bond obligations and collateralized debt obligations, are considered fixed-income investments and representative of that portfolio
How do we define a limited partner?
A limited partner (LP) commits institutional capital to private funds through limited partnership structures, co-investment funds, separate accounts, private mandates and other similar investment vehicles. LPs can include corporates, family offices, foundations and endowments, insurance companies, investment firms, pension funds, banks, sovereign wealth funds, fund of fund managers and other select institutions. As our primary goal is to track how institutional capital is being invested, our listing of LPs in the Database does not extend to high-net-worth individuals (HNWIs) – many of whom invest via family offices, which we do include – or crowd-funding platforms. For funds that receive commitments from HNWIs and LPs, we would add the fund and the LPs to the Database but not the HNWIs.
We track investors that commit capital to closed-ended funds managed by general partners (GPs). We do not track any investor capital dedicated to a strategy of investing directly into property. Qualified investors must have limited liquidity options and the GP must have full discretion over investments made into property.
We hold the following information about LPs on our Database: assets under management, current and target allocation to alternative asset classes, including real estate, contact details, current allocation preferences by geography, strategy and sector, appetite for future fund investments, and current and historic fund commitments.
How do we define a general partner?
A general partner (GP) raises capital from limited partners through closed-ended and open-ended fund structures and/or non-fund vehicles with fund-like economics (co-investments, separate accounts, private mandates). Capital raised through such vehicles is invested by the GP directly into property or invested into third-party pooled vehicles through a fund of funds platform.
The GP must have full discretion over the investments it makes.
The GP information that we hold on our Database includes: assets under management, contact details, current investment preferences and fund-level details, such as amount targeted, amount raised, key dates, LPs in the fund and service providers used.
What strategies do we cover?
Core – Core real estate is often developed property, not in great need of renovation or refurbishment and located in metropolitan cities. This form of real estate enables investors to generate a stable, low-risk income stream. Core real estate is often acquired in order to lease in the long-term and requires little day-to-day management from the asset owner. Due to the nature of the investment, core real estate vehicles tend to be open-ended by design.
Core-plus – Core-plus real estate is similar to core real estate but generates higher rewards against a higher risk profile. These types of properties are again usually found in metropolitan cities and are of high-quality with high occupation. Core-plus property owners have the ability to increase cash flows amongst leaseholders to generate a higher rate of return. Due to the nature of the investment, core-plus real estate vehicles tend to be open-ended by design.
Value-add – Value-add real estate is a riskier investment than core or core-plus but garners the possibility for higher returns. Value-add property is often in need of renovation, firmer hands on asset management from the owner and can require an improvement in occupancy rates. The potential cash flows generated should these points be met is vast, with value-add property investors tending to possess a strong existing knowledge of real estate. Due to the nature of the investment, value-add real estate vehicles tend to be closed-ended by design.
Opportunistic – Opportunistic real estate is the riskiest form of real estate investment. This property often has little-to-no cash flow at the time of acquisition and can require development from the ground-up and rigorous day-to-day management of the property itself, though the long-term returns are substantial. Opportunistic property can either be acquired in a less-developed city, i.e. requiring significant building/renovation work, or can be located in a more-developed city but require the asset owner to lease out significant amounts of occupancy. Due to the nature of the investment, opportunistic real estate vehicles tend to be closed-ended by design.
Real estate debt – Real estate debt fund managers invest in property by providing real estate owners or prospective buyers with loans rather than equity capital to finance transactions.
Funds of funds – Fund of funds managers invest into third-party private real estate funds rather than making direct property investments.
Secondaries – Secondaries fund managers acquire investors’ fund stakes (secondaries fund) or interests in real estate portfolios specifically for investors (direct secondaries fund).
Co-investment – Co-investment vehicles exist to raise additional capital from specific investors, usually alongside a fund in order to finance further transactions.
What sectors do we look at?
Retail – property used for the purpose of exchanging goods or services in a store, shopping centre or outlet mall.
Industrial – used interchangeably with logistics. This is property used for the purposes of storing and moving goods, e.g. warehouses and distribution centres.
Office – property used for the purpose of being a workspace rather than a living space. This property is often leased to tenants to house their employees on a day-to-day basis.
Multifamily/residential – property used for the purpose of housing. Singlefamily property is not included as this is often owned by a retail investor rather than an institutional investor.
Hospitality – property used for leisure purposes, e.g. hotels, amusement facilities, restaurants.
Healthcare – property used for the purpose of providing medical services.
How do we calculate fundraising statistics?
Our quarter-end and full year fundraising statistics count the final closes of all funds and vehicles with fund-like economics (including co-investments, separate accounts and private mandates) with a closed-ended structure, which meet the above criteria.
Fund in market statistics count closed-ended funds and associated vehicles (co-investments, separate accounts and private mandates) which have launched and/or have held interim closes but have not yet held a final close.
We track the equity capital committed to a fund by institutional investors as well as the equity capital contributed by the GP. Leverage is not included in the size of a fund; we do not count total investable capital.
Our fundraising statistics are all given in a US dollar denomination. To calculate conversion rates for funds that do not have a US dollar-denomination we use an average exchange rate for the year in which a fund held a final close. For funds in market we use the exchange rate for the day in which the statistics are created. For example, Q1 statistics will likely use an exchange rate that is correct as at 1 April. All exchange rates are taken from www.xe.com.
Open-ended/evergreen funds, public REITs and real estate securities are not included in our private real estate fundraising statistics.