European investors account for 47% of Billion Dollar Club

The Billion Dollar Club, a group of top investors in the real estate market, has allocated $2.53 tn (€2.19 tn) to real estate, according to new research from Preqin.

This group of investors comprises institutional firms that invest $1 bn (€860 mln) or more in real estate.

In 2018 the number of investors worldwide has grown to 499 members, a 13% increase from the previous year. Europe is the best represented continent with 47% of the club members based here. North America follows with 34% and Asia makes up the rear with 10%.

Worldwide, the biggest portion of the club is represented by public pension funds (28% of the total members) and by insurance companies (21%).

Data analysed by Preqin said that although Billion Dollar Club members comprise just 8% of active investors in real estate, they allocate 84% of total assets under management held by the whole industry.

Tom Carr, head of real estate at Preqin, said: ‘It is striking that this figure has grown so much over the past year, and perhaps reflects a trend towards inflation-hedging and non-correlated assets on the part of investors. The appeal of real estate in this regard is strong: opportunities for investment in the asset class are diverse both globally and across risk/return profiles.’

Real estate also offers several different methods of accessing the asset class, from liquid REITs to long-term direct acquisitions of ‘trophy’ assets, he added. 'This allows investors to manage their liquidity and investment preferences without correlating their real estate portfolios more closely to public market investments. 

‘We may see more investors position themselves in anticipation of a market shift in the coming months and embrace real estate investments further, in which case the Billion Dollar Club could continue to swell,’ he concluded.

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