UPS: seconadaries prices exceeded expectations

The UPS Group Trust didn’t buy any real estate assets on the secondaries market during the second half of 2014 because of high prices.

UPS Group Trust, the Greater Atlanta-based investor, did not purchase any real estate fund positions during the second half of 2014 because of high prices, it has been revealed.

In an interview with PERE’s sister title, Secondaries Investor, real assets portfolio manager Greg Spick said: “Pricing moved past our expectations and I don’t see any near-term movement on prices.”

UPS, which has around $1.6 billion of real estate investments, bought roughly $200 million of real estate fund assets on the secondaries market during the two years leading up to June 2014, Spick said at the time. 

The investor considers itself opportunistic in the market and looks for sellers that need liquidity for a reason and are therefore selling attractive assets.

“It has to be something that makes sense to the seller and us. It’s not something we have to do by any means,” Spick said, adding that a lot of investors are selling stakes with managers they are moving away from. 

He also explained a lot of current deals are coming out of big portfolios, which makes it harder for UPS. “Given the size of our staff, it’s much easier for us to look at a one-off opportunity than it is to look at a whole portfolio.” 

During the first half of 2014 prices of real estate funds reached a record high of 92 percent of net asset value, according to data from Cogent Partners. The prices had increased from 86 percent NAV at the end of 2013 and 77 percent NAV in 2012.