US asset management giant Blackstone has topped a list of global real estate fund managers for the second year running, with assets under management of €184.3 bn – up by €41 bn on the previous year, according to the Fund Manager Survey 2018, published by INREV, ANREV and NCREIF.
The survey also reveals an 11% uplift in total AUM in the industry from €2.4 trl to €2.7 trl in 2017.
For the first time, managers needed to achieve AUM in excess of €100 bn 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 €60 bn.
While growth was greatest among large fund managers, with the top 10 managers accounting for 38.7% of the global total, gains were made across the board with average AUM for all 162 survey participants reaching €16.7 bn, compared with €13.6 bn 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 €95.3 bn, €63.0 bn and €45.9 bn, 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% of total AUM, which was invested entirely in North American strategies.
Non-listed real estate drives growth
Non-listed real estate made up the lion’s share of total AUM globally, accounting for 83.3% or €2.3 trl. In Europe, non-listed real estate represented 92.9% of total AUM.
Funds dominated the composition of the non-listed real estate market, providing almost half of the global, and 51.3% 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%) being attributed to non-listed real estate funds.
Consolidation and sources of capital
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% in Asia Pacific, 47.3% in North America and 43% in Europe. In Asia Pacific, sovereign wealth funds were the second most significant contributors of capital at 15.6%; while in Europe this slot was held by insurance companies at 31.2%.
Commenting on the findings, Lonneke Löwik, INREV’s CEO, said: ‘Real estate is clearly firing on all cylinders with the top 10 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.’