Global asset managers achieve record EUR3 trillion of real estate AUM

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Global real estate

Total global real estate assets under management (AUM) hit a record EUR3.2 trillion at the end of 2019, according to the Fund Manager Survey 2020, published today by ANREV, INREV and NCREIF. 

This year’s results reflect a sizeable rise of 15.7 per cent on 2018’s tally of EUR2.8 trillion, despite the fact that a number of managers were unable to respond to the survey because of the Covid-19 global health pandemic. The growth in total AUM was largely attributable to increased investor inflows and capital appreciation. 

The Blackstone Group tops the list with AUM of nearly EUR250 billion, ahead of Brookfield Asset Management with EUR180 billion and PGIM Real Estate with EUR159.8 billion. Nuveen and Hines complete the line-up of top five mangers with EUR118.3 billion and EUR117.7 billion, respectively. 

Collectively, this year’s top 10 asset managers account for around 40 per cent of the overall total, each achieving at least EUR85 billion of AUM. 

Despite the gap in average AUM separating the top 10 managers from the rest, the overall growth rate for medium and smaller managers outstripped that for larger managers at 18.6 per cent and 11.5 per cent, respectively. 

For managers in certain sectors, growth has also been helped by continuing changes in consumer behaviour. The upsurge in online shopping, for example, has positively impacted the logistics sector helping Prologis to increase its AUM by almost 25 per cent, from EUR84.8 billion to EUR105.6 billion, and placing it sixth in the overall rankings. 

Regionally, managers focused on North American strategies account for the highest percentage of total AUM at 36.6 per cent, closely followed by those in Europe with 33.8 per cent, while managers in Asia Pacific contributed 16.7 per cent to the total. 

PGIM leads the North American rankings, while CapitaLand is the largest manager in Asia Pacific with AUM of EUR55.7 billion. Swiss Life Asset Managers is No.1 in Europe with EUR89.8 billion of AUM, which also pushes it into the overall top 10 list for the first time. The firm’s growth exemplifies the increasing trend of investors leveraging their platforms to raise and manage third-party capital. 

A substantial 82.2 per cent (EUR2.6 trillion) of total AUM in 2019 was accounted for by non-listed real estate vehicles. In Europe, non-listed makes up more than 90 per cent of AUM; in North America it is 79.3 per cent and it is 71.2 per cent in Asia Pacific. 

Funds account for 44.6 per cent of the non-listed real estate vehicles total, making them the most popular form of investment structure regardless of geography. Of the notable alternative vehicle types, non- listed debt products are more preferred in North America than elsewhere, where they account for 14.3 per cent of AUM, compared with 3.6 per cent in Europe and 1.3 per cent in Asia Pacific. 

The survey results also highlight the continuing trend for market consolidation. As in 2019, 20 per cent of respondents reported having been involved in M&A activity over the past decade, with a third of them citing a desire to extend their geographic reach as a key motivation. 

Henri Vuong, INREV’s Director of Research and Market Information, says: ‘The scale and prominence of the largest managers continues apace, but growth across the board is impressive. And behind the numbers there are some interesting stories to tell. The investor / manager hybrid is clearly making its presence felt and we could see much more of this in the future. Likewise, appetite for consolidation shows no signs of abating and will likely only accelerate in the current market conditions.’