Keeping the faith
The private real estate sector has a watchful eye on how regulation, data and technology are impacting business. These factors exert unprecedented pressures on fund managers’ operating environments, across all alternative asset classes. Given this uncertain climate, managers are opting for traditional domiciles – with familiar tax and regulatory regimes, and optimal conditions for doing business – for their next funds. Yet despite the potential for disruption, fund managers that responded to this survey are not expecting it to negatively impact performance over the next decade.
Delaware is the domicile of choice for a clear majority of respondents: 54 percent intend to register their next fund in the US state. It is clear why from the survey data. The US state is seen to offer optimal conditions for doing business, and the most favorable regulatory and tax frameworks. It is worth keeping in mind the majority of respondents are headquartered in North America, which may have had an influence over choice. Nevertheless, it is a vote of confidence in Delaware as a business-friendly jurisdiction.
PERE surveyed the 75 largest private real estate managers. We received 51 responses: 31 are headquartered in North America 11 in Asia and nine in Europe. Answers were given on a strictly anonymous basis and the results aggregated. Where respondents were asked to give three answers, the first answer was given three points, the second two points and the third one point. An average was then taken of the total.
This article is sponsored by RBC. It appeared in the Regulation and Fund Domiciles supplement with the May 2018 issue of PERE.