Despite the industry’s well documented woes, real estate is once again making limited partners salivate, according to a panel of senior institutional investment professionals.
At a recent conference in New York devoted to women in alternative assets, senior-level LPs said that they are still interested in real estate, though that portion of their portfolio has suffered worse write-downs than traditional private equity.
The opening panel of The Women’s Alternative Investment Summit today (an off the record event), included three CIOs from an asset management firm, a foundation and a university endowment, respectively, as well as a managing director from a teacher’s pension fund. All invest across the alternative investment space. The panelists were asked how they would allocate their next dollar of capital today if they could. Two chose real estate emphatically, and one gave a more measured endorsement but said she would not disagree.
The fourth said she would wait six months before putting capital to work in real estate, expressing scepticism that the market has reached a bottom. For now, European distressed-for-control plays and energy – oil in particular – are at the top of her list.
On a separate panel, a senior investor relations professional at a major US buyout and real estate firm confirmed that most of the LPs she has spoken to recently say that “if they had any allocation, they’d be putting it towards real estate”.