18 July 2018, Amsterdam - Non-listed real estate funds of funds remain important vehicles offering investors significant diversification options according to the ANREV / INREV Funds of Funds study released today. The share of total capital raised in 2017 doubled for fund of funds.
In total, €152.3 billion of fresh equity was raised for non-listed real estate, with €8.1 billion or 5.2% destined for fund of funds. This is a record level of new capital and a significant jump from the €3.0 billion or 2.5% of the total capital that was raised in 2016.
Fund of funds delivered positive returns to their investors, whether broken down by style, structure, regional strategy or size. The results showed that one in seven investors plan to increase their allocations to funds of funds over the coming two years. The sector achieved an annual return of 5.1% over 2017, slightly down on the 6.2% achieved previously.
Global strategies dominate
Funds of funds with a global strategy comprise the largest share of vehicles in the universe, both by number and size. Global strategy vehicles make up just under 50% of the overall vehicles and represent 78.6% of total NAV.
Vehicles with a European strategy followed next, representing 33%, whilst those targeting Asia Pacific represent 20%. Strategies targeting North America were minimal.
All regional strategies delivered positive returns, but those targeting Asia Pacific especially so. After a few years of subdued performance, Asia Pacific funds of funds posted a remarkable comeback with returns of 15.1% in 2017, a strong come back from the -3.3% recorded in 2016. In comparison, European and global funds generated 6.6% and 4.4% respectively, performance similar to last year.
Confidence in core vehicles
The funds of funds universe is almost evenly split across the three main investment styles, core, value added and opportunity. However, core funds are much larger in size than the other two, in fact making up just over four fifths, 83.1%, of total NAV. They also invest on average in 20 vehicles and 16 managers which is double the number for value added and opportunity funds of funds.
‘The results demonstrate that funds of funds remain in good health. For smaller investors in particular, they offer significant diversification options, and the opportunity to create a nice blend of different aspects.’ Commented Lonneke Löwik, INREV CEO.
‘It’s no surprise to see the positive figures from INREV as funds of funds continue to be an excellent tool for investors. They are a great way to achieve exposure to best in class fund managers or niche strategies, while simultaneously reducing risk due to significant diversification across sectors and regions.’ Commented Dimme Lucassen, Senior Investments Manager, Aberdeen Standard Investments.
– Ends –
For further information, please contact:
Johlyn da Prato, johlyn.da.prato@inrev.org | +31(0)621397456
Lauren Hewitt, inrevteam@firstlightpr.com | +44 (0) 7776 146 434
Jack Rodgers, inrevteam@firstlightpr.com | +44 (0) 7580 427 746
Notes to Editors
About the Funds of Funds Study 2018
The ANREV / INREV Funds of Funds Study provides an overview of the funds of funds industry globally, including insights by target region, by style and structure and other associated characteristics. It also provides analysis of the performance of funds of funds.
The study was launched in 2012 and since 2015 it has an international scope being conducted in conjunction with ANREV in Asia Pacific.
This year’s study includes 60 funds of funds managed by 25 managers from the funds of funds universe. Collectively these vehicles represent a total Net Asset Value (NAV) of €13.9 billion.
About INREV
INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, was launched in May 2003 as a forum for investors and other participants in the growing non-listed real estate vehicles sector. The association represents and reflects an industry with a total value of €2.7 trillion and INREV members deliver €300 billion of stimulus to the real economy of Europe.
INREV has 427 members which include 75 of the largest institutional investors as well as 40 of the 50 largest real estate fund managers, plus banks and advisors across Europe and elsewhere.
The non-profit association is focused on increasing the transparency and accessibility of non-listed vehicles, promoting professionalism and best practice, and sharing knowledge. It is based in Amsterdam, the Netherlands. https://www.inrev.org
About ANREV
ANREV is the Asian Association for Investors in Non-Listed Real Estate Vehicles, a not-for-profit organisation based in Hong Kong. ANREV's agenda is driven by the members, in particular the investors, and is focused on improving transparency and accessibility of market information, promoting professionalism and best practices, sharing and spreading knowledge. Fund managers, investment banks, lawyers and other advisors provide support in addressing key issues facing the Asian non-listed private equity real estate fund markets.
ANREV is a sister organisation to INREV in Europe and works with a number of associations across Asia Pacific and North America on research and professional standards. http://www.anrev.org
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Funds of Funds Study 2018
Last updated on 23 Jul 2018
The Funds of Funds Study 2018 provides an overview of the fund of funds industry globally, including insights by target region, by style and structure and other associated characteristics, as well as detailed analysis of the performance of funds of funds. The study is international in scope, and is conducted in conjunction with ANREV in Asia Pacific.