Private equity real estate managers reduce targeted returns

Private equity real estate managers find that asset valuations are the chief concern for their firms, with competition for assets equally daunting. A poll of 191 global managers by information provider Preqin found that 66% of European private equity houses are finding competition for real estate assets tougher than the previous year. The firm also said that as demand increasingly outstrips supply for attractive assets, 63% of managers globally have seen an increase in asset pricing. Due to these challenging market conditions, 51% of private equity real estate fund managers have reduced the targeted returns of the funds, with only 11% increasing their performance objectives. Within private equity it seems size matters as 80% of managers larger than $5 billion stated investor appetite for real estate had increased, which according to Preqin follows the trend of the largest firms securing a growing proportion of capital. Environmental social and governance issues are also taken into consideration by real estate fund managers, as 31% consider ESG factors in all their deals. However, just 22% and 37% of managers based in North America and Europe respectively take ESG factors into account, compared to 59% outside these regions. The Preqin poll regional breakdown is as follows; 62% of respondents from North America, 23% from Europe, 7% from Asia, 3% from Australasia, 3% from Central and South America and 1% from both the Middle East and North Africa and Sub-Saharan Africa. ©2016 funds europe

Sponsored Profiles

SPONSORED FEATURE: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

CEO INTERVIEW: Munro gains three-year track record

Mar 16, 2017

Aviva Investors’ annual results this month were the third set since Euan Munro took over as CEO. Nick Fitzpatrick speaks to him about the ‘Aims’ fund at the heart of the firm’s outcome strategy.

DISTRIBUTION INTERVIEW: Tales of the unexpected

Mar 16, 2017

Laurence Terryn, a fund selector at Candriam, tells David Stevenson how the twists and turns of the past year’s macro environment flavoured her approach to fund selection.



Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.

SEC LENDING ROUNDTABLE: Both a borrower and a lender be

Jan 11, 2017

Industry heavyweights, including agent lenders, discuss issues affecting the securities lending sector such as regulation and the types of collateral being used.