Blackstone leads upsurge in global real estate
The Blackstone Group has topped a list of global real estate fund managers for the second year running, with assets under management of EUR184.3 billion – up by EUR41 billion on the previous year, according to the Fund Manager Survey 2018, published by INREV, ANREV and NCREIF.
The survey also reveals an 11 per cent uplift in total AUM from EUR2.4 trillion to EUR2.7 trillion in 2017.
For the first time, managers needed to achieve AUM in excess of EUR100 billion to feature in the top five, which this year included: The Blackstone Group, Brookfield Asset Management, PGIM, Hines and TH Real Estate. In 2015, the equivalent figure was less than EUR60 billion.
While growth was greatest among large fund managers, with the top 10 managers accounting for 38.7 per cent of the global total, gains were made across the board with average AUM for all 162 survey participants reaching EUR16.7 billion, compared with EUR13.6 billion in 2016.
But despite the significant overall headline numbers, the largest managers in North America, Europe and Asia Pacific delivered quite different levels of total AUM at EUR95.3 billion, EUR63.0 billion and EUR45.9 billion, respectively.
Also, for the first time, capital from investors domiciled in Africa featured in the survey, with an admittedly tiny but perhaps structurally significant contribution of 0.7 per cent of total AUM, which was invested entirely in North American strategies.
Non-listed real estate made up the lion’s share of total AUM globally, accounting for 83.3 per cent or EUR2.3 trillion. In Europe, non-listed real estate represented 92.9 per cent of total AUM.
Funds dominated the composition of the non-listed real estate market, providing almost half of the global, and 51.3 per cent of the European, totals; reinforcing an upward trend in investor preference for funds, which was also highlighted in the global Investment Intentions Survey 2018. Asia Pacific strategies, in particular, showed a significant proportion of AUM (58.8 per cent) being attributed to non-listed real estate funds.
One in four fund managers recorded having been involved in merger and acquisition activity over the past decade, slightly up on last year and continuing the trend for consolidation, possibly explaining the dominance of large players.
As in previous years, this survey showed that the bulk of capital was contributed by pension funds – 51.3 per cent in Asia Pacific, 47.3 per cent in North America and 43.0 per cent in Europe. In Asia Pacific, sovereign wealth funds were the second most significant contributors of capital at 15.6 per cent; while in Europe this slot was held by insurance companies at 31.2 per cent.
Commenting on the findings, Lonneke Löwik, INREV’s CEO, says: ‘Real estate is clearly firing on all cylinders with the top ten players making very sizeable gains. One of the really exciting elements of this year’s survey is that non-listed funds have proved a powerful engine for overall growth. It’s a picture we’ve seen emerging over the past four years and all the indications are that this trend is set to continue.’