For more than a decade, we have operated under two names. In the Americas, Japan and Korea, we were known as Prudential Real Estate Investors, while in all other markets around the world, we marketed under Pramerica Real Estate Investors. Last month, we announced that we would change both names to PGIM Real Estate – a single name around the world – to better support our globally diversified investment platform and client base.
The two different names were the result of an agreement that governs the use of the Prudential name in markets around the world between our parent company, Prudential Financial, and Prudential plc, the unrelated UK-based insurance and financial services company.
During the course of the last decade, the number of countries in which our clients are based has increased nearly fourfold and today spans 28 countries. In addition, capital commitments from our non-US clients into our core, core plus, value-add and high-yield debt strategies comprised approximately half of our new business during the last five years. Over the years, we found we were spending a lot of time having to explain our two names and clarify who we are and who we are not. So when PGIM, the $1 trillion investment management businesses of Prudential Financial, of which we are a part, made a global name change in January 2016 to bring consistency in multiple markets and to better reflect its position as one of the world’s largest asset managers, we decided to follow suit.
Since 2014, one-third of the capital PGIM Real Estate has raised has come from investors looking to commit capital outside of their home markets into our regional strategies. Notably, two-thirds of PGIM Real Estate’s Asia Pacific clients have invested in US real estate strategies. Out of our European clients, half have committed capital to US, Asia Pacific and Latin American real estate strategies, with nearly one-third investing specifically in Asia Pacific. We have continued to see this trend throughout the first few months of 2016.
As we look at the wider trend of real estate capital flows, we expect that our clients’ cross-border activity will continue to grow. According to Real Capital Analytics, cross-border flows have been steadily growing and in 2015 increased by 28 percent to a total of $289 billion. In particular, Asian investors have notably increased their allocations to international real estate in a bid to gain diversification of their portfolios. Capital from Asia made up 29 percent of all cross-border flows last year, compared to 5 percent in 2007, while the US and Europe are the preferred investment destinations for capital from all regions.
Against this backdrop, it became clear that changing to one single name and making ourselves more easily recognizable in the marketplace could lead to a more seamless overall client experience and enhance our company profile for potential new clients. At the same time, given the scale of our business, we recognized that in the near term this change would undoubtedly come with some challenges. Our first and foremost priority is educating our investors and joint venture partners about the new name and our rationale for the change. We have communicated to them directly in person and through official notices, and plan to reiterate this in all of our communications, advertising and press going forward.
Importantly, we have retained the well-known Prudential rock logo in our new PGIM Real Estate marketing materials as a way to keep us connected to our parent company. This branding decision further reinforces that while our name has changed, the same service and investment capabilities that we’ve built and delivered to clients and partners over the last 45 years stays the same.
The name change supports the already global nature of our business, and we will continue our long legacy of investing with discipline and creating value for our clients. With a single brand identity and name, we’ll be more easily recognized as a global real estate investment manager of quality and strength.