Top 10 real estate managers set new AUM record – survey

Total real estate assets under management broke the €3 trillion barrier in 2019, with a new AUM threshold of €85 billion for the top 10 firms, according to industry organizations INREV, ANREV and NCREIF.

This record was achieved despite a 20 percent drop in respondents for the INREV/ANREV/NCREIF Fund Manager Survey 2020, published on June 3. A total of 140 managers participated in the survey, compared with 173 last year, which INREV blamed on remote working and a reshuffle of priorities as a result of covid-19.

Here are four key takeaways from this year’s survey:

1. Total real AUM hit a new record

Total real estate AUM climbed to €3.2 trillion in 2019, up by 15.7 percent from €2.8 trillion at the end of 2018, marking the sixth consecutive year of steady growth.

Henri Vuong, director of research and market information at INREV, said she was expecting a rise in total AUM on the back of the record levels of capital raising.

“Value appreciation in the underlying assets has also contributed to the increase in AUM,” Vuong told PERE.

The average AUM per manager now stands at €23.1 billion for 2019, up from the previous year’s average of €16.1 billion.

2. The top 10 managers also reached a new threshold

For the first time, the 10 largest managers reported total allocations to real estate above €85 billion. This represents a notable increase from 2018, when a manager needed €65 million to get into the top 10.

Blackstone topped the list for the fourth year in a row, reporting a real estate portfolio of nearly €250 billion in 2019, up 23 percent from 2018.

Brookfield and PGIM maintained their respective second and third places, achieving €118.3 billion and €117.7 billion, respectively.

The ranking has a new entrant, Swiss Life Asset Managers, which debuted in the survey in ninth place after raising third-party capital last year via the real estate investment management platforms it has acquired, including Mayfair Capital and BEOS.

“Firms which typically would have been classified as institutional investors but are now managing external capital with a manager is a trend that we’ve seen evolve in the market,” said Vuong. “Allianz is another example of that, so we will most likely see them contributing to our next report.”

3. Non-listed real estate continued to dominate total real estate AUM

Non-listed real estate vehicles continue to comprise the largest portion – 82.2 percent (€2.6 trillion) – of the €3.2 trillion in total real estate AUM globally. Listed vehicles and other types of real estate account for 10.4 percent (€330 billion) and 7.4 percent (€240 billion), respectively, of the total.

Funds remain the most popular vehicle, representing more than 40 percent of the AUM for non-listed real vehicles.

“Non-listed real estate as an asset class has grown considerably over the past 10-15 years,” said Vuong. “It first started when INREV started and then it was all about funds. But that spectrum is much broader today and includes a wide range of investment vehicles (JVs, clubs, separate accounts).”

In fact, INREV revised its fund manager story to a real estate management survey a few years ago to reflect this shift in non-listed real estate, she noted.

4. Top 10 unlisted managers mirrored the overall top 10

Blackstone, PGIM and Brookfield maintained the top three spots among non-listed real estate managers, in tandem with the overall top 10 AUM chart.

“This ranking is similar to the overall top 10 chart, with the exception of MetLife that has grown their AUM on the non-listed side,” said Vuong.

“On the other side, Prologis appeared in the top 10 AUM overall but not on the non-listed side because they have a strong direct portfolio alongside their non-listed business. Another one like this is UBS, which has a large listed portfolio.”

Blackstone topped the non-listed real estate AUM across all strategies, as well as global, Asia-Pacific and European strategies, but was overtaken by PGIM Real Estate in terms of North American strategy.