NCREIF/INREV/ANREV/FundManagerSurvey2016Snapshot
Theurgetomergeandsplurgeleadstoconcentrationamongfundmanagers.
Top 10 fund managers make up 41.0% of total AUM Each of the top three fund managers have AUM exceeding $100 billion Global strategies and North American strategies are larger than others Total real estate assets under management (AUM) in the non‐listed real estate industry grew to $2.19 trillion in 2015 from $2.17 trillion in 2014. Overall, the 10 largest fund managers represent 41.0% for total AUM, up from 36.5% last year. With $149.8 billion of global AUM, Brookfield Asset Management tops the list in the 2016 survey. The Blackstone Group ranks second overall and, following the TIAA acquisition of TH Real Estate, the combined company moved into third place. For North American strategies, Brookfield Asset Management is the largest fund manager with AUM of $97.5 billion. Second place for North American strategies goes to TIAA/TH Real Estate with $62.5 billion in AUM, and next is JPMorgan Asset Management with $58.7 billion of AUM. Figure 1: Total real estate assets under management by regional strategy 13.5%
17.7%
Asia Pacific
European
North American
Global
South American
32.0%
34.9%
For European strategies, Aviva Investors is in the top position with $49.2 billion of AUM. The second and third slots are filled by CBRE Global Investors and Credit Suisse, with AUM of $45.0 billion and US$40.6 billion, respectively. In terms of Asia Pacific strategies, CapitaLand is the largest fund manager with AUM of $43.9 billion. The second place goes to Fosun Property Holdings with $34.2 billion in AUM, and next is Mapletree Investments with $22.8 billion of AUM. European strategies account for the largest share of global AUM, at $765.1 billion, or 34.9% of the total. North American strategies are a close second at 32.0% of global AUM, or $701.6 billion. Asia Pacific strategies account for $387.0 billion in AUM and Global strategies with more than one region targeted represent $296.5 billion in AUM. Figure 2: Value proportion of non‐listed real estate funds by style and regional strategy 100%
13.5%
90%
80%
35.8%
3.5%
16.3%
10.3%
46.9%
70%
76.6%
60%
50%
21.1%
40%
76.2%
22.9%
80.2%
30%
20%
43.2%
3.8%
10%
19.6%
30.2%
0%
Asia Pacific
European
Core
North American
Value added
Global
South American
Opportunity
Overall, fund managers manage a total of 2,970 non‐listed direct real estate vehicles with a combined value of $1.6 trillion. Of that amount, non‐listed real estate funds account for $1.0 trillion, spreading across 1,522 different funds. By value, non‐listed real estate funds with a European strategy amount to $370.9 billion for a 38.7% share of the global fund total. North American vehicles constitute $296.8 billion, or 31.0%, of this universe. Funds with an Asia Pacific or Global strategy hold an equal weight of $141.1 billion, or 14.7% each. South American regional strategies account for $8.5 billion of global funds. In terms of the most common investment style for the various regional strategies, funds fall into two broad camps as measured by value: the European and North American strategies, where core is prevalent, and the Asia Pacific and other regional strategies, where the higher risk value‐added and opportunistic styles are more common. It is striking that funds with a global strategy lean toward an opportunistic approach, which represents over three‐quarters (76.6%) of value in these funds. Figure 3: Value proportion of institutional investor client base by type 100%
90%
80%
70%
12.0%
8.8%
6.5%
5.7%
11.2%
7.0%
4.9%
3.6%
4.9%
3.5%
7.5%
1.8%
2.0%
3.9%
6.7%
9.4%
6.0%
7.3%
7.7%
60%
15.0%
50%
3.0%
15.5%
50.0%
45.7%
50.4%
2011
2012
2013
13.6%
14.4%
13.9%
40%
30%
20%
42.8%
48.6%
10%
0%
2014
Pension funds
Insurance companies
Sovereign wealth funds
Government institutions
Charities, foundations & non‐profits
Funds of funds
High net worth individuals/ family offices
Investment banks
Corporations
Other/ Unspecified
2015
Pension funds continue to dominate the institutional market, representing 48.6% of the client base in 2015 for non‐listed direct real estate vehicles, up from 42.8% in 2014. Insurance companies remain the second largest group of institutional investors, although their share has fallen slightly to 13.9% in 2015 from 14.4% in 2014. However, it is noteworthy that insurance companies have increased their share significantly since 2011. Sovereign wealth funds have increased their presence from 6.7% of the institutional client base in 2014 to 9.4% in 2015. The remainder of the investor base comprises of a variety including corporations, funds of funds and others. Institutional investors continue to be the main investor type for non‐listed direct real estate vehicles. For non‐listed real estate funds, institutional investors make up 82.0% of AUM, another 13.4% of this asset base is in retail investments, and the remainder is split between manager co‐investments and other sources. The corresponding share for institutional investors is 96.2% in separate accounts and 60.4% in joint ventures and club deals. The full report is available to members at www.ncreif.org.