The PERE GI 100 edges up

PERE's 2023 ranking of institutional investors by equity invested in private real estate has grown, but more slowly, in another sign of the times.

This year’s Global Investor 100 ranking of institutional investors by equity invested in private real estate is, once again, bigger than before; aggregate exposure to the asset class in 2023 is $1.78 trillion.

However, growth has slowed since the top 100 investors saw a prolific recovery in 2022 following the covid-19 crisis. This year’s total is 4.5 percent greater than last year’s, which was 13.5 percent bigger than in 2021, when the world was stifled by the effects of the global pandemic.

One does not have to look far to explain a slowdown in deployment by this list of insurers, sovereign wealth funds, public and private pensions and other kinds of institutions. In a sector still so dependent on significant leverage to perform, even for these organizations with their large amounts of equity, soaring interest rates were always going to hinder the expansion of their portfolios.

Whether curtailed from investing like before, or because more focus is needed on managing or divesting assets, the net result for many institutions has been a drop in outlays, whether direct or via commitments to indirect structures. Both types of deployment are included in the equity totals used for calculating investor positions on the GI 100 ranking. The denominator impact has also played a part, with valuation movements in other asset classes impacting what these investors can, or are willing to, do in private real estate.

Of course, within this big picture there is plenty of nuance. As we explore in this section, while European institutions remain as proportionately represented in terms of number, they are notably diminished in terms of standing on the ranking, with some 25 investors falling against just five rising.

Speaking of rising, a special mention is due for GIC. The Singaporean sovereign wealth fund chose to capitalize on this period of relative stasis for many of its peers by deploying notably high amounts of capital – climbing to the number one position for the first time in the process.

Those were the two standout stories for us to tell from this year’s GI 100 ranking; review the ranking table and no doubt you will spot more.