The 2013 preqin_global_real_estate_report_sample_pages
Upcoming SlideShare
Loading in...5
×
 

The 2013 preqin_global_real_estate_report_sample_pages

on

  • 232 views

 

Statistics

Views

Total Views
232
Views on SlideShare
232
Embed Views
0

Actions

Likes
0
Downloads
4
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    The 2013 preqin_global_real_estate_report_sample_pages The 2013 preqin_global_real_estate_report_sample_pages Document Transcript

    • alternative assets. intelligent data.ISBN: 978-1-907012-63-1$175 / £95 / €115www.preqin.com2013 Preqin GlobalReal EstateReportSample Pages
    • 2013 Global Real Estate ReportContentsCEO’s Foreword 3Section One: The 2013 Preqin Global Real Estate ReportKeynote Address – Carrie Coulson, Director –Real Estate, MVision5Section Two: Overview of the Private Real EstateIndustryPrivate Real Estate in 2013 – Outlook for theYear Ahead – Andrew Moylan, Preqin7Attractive Relative Returns in a Low ReturnWorld – Greg MacKinnon, Director of Research,PREA8Section Three: Assets under Management and DryPowderAssets under Management and Dry Powder 9Section Four: FundraisingOverview of 2012 Fundraising Market 11Current Fundraising Market 14North American Fundraising 15European Fundraising 16Asian Fundraising 17Rest of World Fundraising 18Section Five: Fund ManagersOverview of Private Real Estate Fund Managers 19Largest Fund Managers League Table 20Fund Manager Investment Criteria 21Section Six: PerformanceExamination of Private Real Estate Performance 23Consistent Performing Fund Managers 26Real Estates Returns for Pension Funds 27Target IRRs 28Section Seven: InvestorsOverview of Real Estate Investors 29Investor Appetite for Private Real Estate 32Strategies and Geographies Targeted in 2013 34Separate Accounts 35Investor League Tables 36Section Eight: Investment ConsultantsInvestment Consultants in Real Estate 37Section Nine: Fund Terms and ConditionsReal Estate Fund Terms and Conditions 39Leading Law Firms Involved in Fund Formation 40Section Ten: Real Estate Debt Fund MarketReal Estate Debt Fund Market 41Section Eleven: Real Estate Funds of FundsOverview of the Real Estate Fund of FundsMarket43Section Twelve: SecondariesInvestor Activity in the Real Estate SecondaryMarket45Section Thirteen: Placement AgentsReview of Placement Agents 47Section Fourteen: Preqin ProductsOrder Forms 49The 2013 Preqin Global Real Estate Report - Sample Pages
    • SectionTwo:OverviewofPrivateRealEstateIndustryalternative assets. intelligent data.2. Overview of Private Real Estate Industry5The 2013 Preqin Global Real Estate Report - Sample PagesPrivate Real Estate in 2013 – Outlook for theYear Ahead- Andrew Moylan, PreqinFundraising remained challenging in2012 as a result of economic uncertainty,a lack of new commitments being madeby investors and a large number offunds on the road. Closed-end privatereal estate funds that held a final closeduring the year raised an aggregate$55bn, a small decline on the $57bn thatwas raised by funds that closed in 2011.There were some notable fundraisingsuccesses, with 52% of funds thatclosed in 2012 doing so on or abovetarget, including the $13.3bn final closeof Blackstone Real Estate Partners VII,the largest closed-end private real estateever raised.For many firms however, securingcommitments remained difficult.Fundraising is now a long process, withmanagers spending an average of justunder 18 months marketing their funds.Raising a first-time fund is particularlydifficult, with fewer investors nowprepared to invest with new firms. Just21% of investors will commit to first-timefunds, compared with 41% in December2009. More than ever, investors want tosee evidence of a strong track record,and in particular that a firm performedwell during the downturn, as well as ingrowing markets.While the number of funds in marketdid fall during the final quarter of 2012,with 449 funds currently on the roadtargeting an aggregate $147bn in capitalcommitments, the fundraising marketremains extremely crowded. Even withimproving investor sentiment, there willlikely continue to be a significant numberof managers falling short of their fundtargets or abandoning their fundraisingefforts altogether.Investor SentimentThere are strong signs that investorconfidence in private real estate funds isreturning, with 53% of investors surveyedby Preqin in December 2012 planningto make new commitments to the assetclass in 2013. In a similar study conductedin December 2011, just 36% of investorsexpected to make commitments in thefollowing 12 months. The majority (54%)of investors also expect to commit morecapital to the asset class in 2013 thanthey did in 2012.Real estate remains an important part ofmany sophisticated investors’ portfolios,with 93% of institutional investors activein the asset class targeting exposureto property of at least 5% of their totalassets. As well as having the potentialto generate strong returns, real estateportfolios can offer diversification, act asan inflation hedge, and provide a steadyincome stream; we have seen only avery small proportion of investors scaledown their exposure to the asset class.In the longer term, just 9% of investorsexpect to reduce their allocations to realestate, while 39% expect their allocationsto increase.While a large proportion of investorsfocused primarily on core investmentsfollowing the downturn, many are nowincreasingly looking at opportunitieshigher up the risk/return spectrum.Investor interest in core remainedstrong during 2012, but there was alsoincreased appetite for core-plus, valueadded and opportunistic strategies. Realestate debt is also gaining more interestfrom investors, with a growing proportionbelieving it can add value to their realestate portfolios.The use of separate accounts is alsocontinuing to increase, with someinvestors viewing this as a way to investsignificant amounts of capital, whileretaining a greater level of control thanthey might have with a commitment to ablind-pool fund. These typically remainthe preserve of larger, more experiencedinvestors however, and many small- ormid-sized investors lack the additionalresources required to invest throughseparate accounts.PerformanceRecent performance of the real estateasset class is also encouraging. Preqin’slatest study of the performance of publicpension funds’ portfolios found thattheir real estate investments generateda median return of 10.0% in the 12months to June 2012, more than anyother major asset class. In each of thenine quarters to June 2012, there wasan average increase in NAV for privatereal estate funds and there are positivesigns for private real estate funds ofmore recent vintages. The median IRR of2009 vintage funds stood at 12.9% as ofJune 2012, with three-quarters of fundsgenerating IRRs of 9.5% or more.This must of course be placed in context;many investors suffered significantlosses in 2008 and 2009 and despitethe improvements in recent quarters,many are still disappointed with thereturns they have received. Forty-sevenpercent of investors surveyed by Preqinin December 2012 felt the performanceof their private real estate portfolios hadfallen short of their expectations.Outlook for 2013Fundraising looks certain to remainchallenging in 2013. There are signsof improving investor appetite, witha growing proportion of institutionsexpecting to commit capital to privatereal estate in the coming year; however,a significant proportion still do not expectto be active. While a dramatic increasein fundraising is unlikely, 2013 may seemore capital raised than was securedin 2012. Firms marketing new vehicleswill need to demonstrate a strong trackrecord, have competitive fee structuresand an alignment of fund managerand investor interests, and be able toclearly differentiate themselves from thecompetition in order to be successful.
    • SectionFour:Fundraisingalternative assets. intelligent data.4. Fundraising11The 2013 Preqin Global Real Estate Report - Sample PagesThe private real estate fundraising markethas stabilized in recent years, with theamount of capital secured by fundsclosed each year between 2009 and2012 remaining around $50bn. Thereare signs that investor sentiment towardsreal estate is gradually improving, butmany institutions did not commit capitalto the asset class during 2012 and, witha large number of funds on the road,fundraising is likely to remain challengingin 2013.Fundraising by QuarterAlthough 2012 saw a drop in the numberof funds closed to 142 compared tothe 175 closed in 2011 (Fig. 4.1), theaggregate capital raised remained fairlystable, with funds closed in 2012 raising$55bn compared to the $57bn raisedby funds closed in 2011. Fig. 4.2 showsthat Q4 2012 saw the highest quarterlyaggregate capital commitments ($23bn)of any quarter in the past four years;however, it is important to note that thequarter included the $13.3bn close ofBlackstone Real Estate Partners VII, thelargest closed-end private real estatefund ever raised. The largest fund inmarket, Brookfield Asset Management’sBrookfield Strategic Real Estate Partnersis targeting a significantly smaller $3.5bn.Manager ExperienceMore experienced managers accountedfor a greater proportion of the capitalraised in 2012, with many investorsincreasingly focused on investing withmanagers with a strong track record.Fig. 4.3, which measures experienceby the number of funds a manager hasraised, shows that 46% of capital raisedin 2012 was secured by fund managerswhich have closed 10 or more funds.It is important to note the influence ofBlackstone Real Estate Partners VII onthis graph, with the $13.3bn committedto the fund included in the capital raisedby fund managers which have closed 10or more funds. Despite this, the numberof funds raised by firms which haveOverview of2012 Fundraising Market36 3644663340 41584439 40524334 353015 1410131612108121513171381123010203040506070Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011 2012No. of FundsClosedAggregateCapital Raised($bn)Fig. 4.2: Quarterly Closed-End Private Real Estate Fundraising,Q1 2009 - Q4 201217%12%27%22%7%10%6%6%14%3%29%46%0%10%20%30%40%50%60%70%80%90%100%2011 201210+ Funds Raised8-9 Funds Raised6-7 Funds Raised4-5 Funds Raised2-3 Funds Raised1 Fund RaisedFig. 4.3: Breakdown of Capital Raised by Closed-End Private RealEstate Funds by Manager Experience, Funds Closed 2011 – 2012ProportionofAggregateCapitalRaisedYear of Final CloseSource: Preqin Real Estate Online Source: Preqin Real Estate Online8194168242298354315182172 17514214 16427610413114052 4657 550501001502002503003504002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012No. of FundsClosedAggregateCapital Raised($bn)Fig. 4.1: Annual Closed-End Private Real Estate Fundraising, 2002-2012Source: Preqin Real Estate OnlineReal Estate Online providesdetailed profiles for over 4,000unlisted real estate funds, includingover 470 private real estate fundsin market.For more information, or to arrangea demonstration, please visit:www.preqin.com/reoData Source:
    • SectionFive:FundManagersalternative assets. intelligent data.5. Fund Managers19The 2013 Preqin Global Real Estate Report - Sample PagesThere has been considerable growthin the number of private real estatefund managers that are active in recentyears, despite the tough fundraisingenvironment. Preqin tracks more than1,600 private real estate firms, includingmanagers of both closed- and open-ended funds, which between themmanage over 3,800 vehicles. Globally,the private real estate industry employsan estimated 14,500 people.The closed-end fund model is the modelmost widely used by private real estatefund managers. In terms of fund typesmanaged, 83% of firms only manageclosed-end funds, and 10% manageonly open- or semi-open-ended funds.The remaining 8% are managers ofboth closed- and open/semi-open-endedfunds.North America remains the base forthe majority of private real estatefirms, accounting for 55%, as Fig. 5.1shows. Europe is the second mostsignificant region for such firms, with29% headquartered in the region; thisis a one percentage point increase froma year ago. Of the remaining firms, 8%are based in Asia-Pacific, and 3% are ineach of the Middle East and Israel, andAustralasia. The final 2% is made up ofAfrica- and Latin America-based privatereal estate firms.New York and London are the twomost important metropolitan areas forprivate real estate firms, with 183 and171 firms respectively headquartered inthese cities (Fig. 5.2). Sixty-nine privatereal estate firms are headquarteredin Los Angeles, less than half thenumber based in London. US citiesaccount for six of the top 10 locationsfor headquarters of private real estatefund managers, and Sydney, Mumbaiand Toronto make up the remainder.Overview of Private Real EstateFund Managers55%29%8%3% 3%1% 1%North AmericaEuropeAsia-PacificMiddle East & IsraelAustralasiaLatin AmericaAfricaFig 5.1: Breakdown of Private Real Estate Firms by Location of HeadquartersFig. 5.2: Top 10 Metropolitan Areas for Private Real Estate Firms(Based on Headquarters)Metropolitan Area No. of FirmsNew York 183London 171Los Angeles 69Chicago 56San Francisco 42Boston 38Dallas 36Sydney 29Mumbai 24Toronto 1939%32%21%7%0%5%10%15%20%25%30%35%40%1 Fund 2-3 Funds 4-7 Funds 10 or More FundsFig. 5.3: Breakdown of Private Real Estate Fund Managers byNumber of Funds ManagedProportionofPrivateRealEstateFirmsNo. of Funds ManagedSource: Preqin Real Estate OnlineSource: Preqin Real Estate Online Source: Preqin Real Estate OnlineReal Estate Online featuresdetailed profiles of over 1,680fund managers from around theworld.For more information, or toarrange a demonstration, pleasevisit:www.preqin.com/reoData Source:
    • 32 © 2013 Preqin Ltd. / www.preqin.comThe 2013 Preqin Global Real Estate Report - Sample Pages 7. InvestorsDuring Q4 2012, Preqin conducted aseries of extensive interviews with over100 institutional investors in private realestate funds from around the world inorder to examine their attitudes towardsthe asset class and their outlook for 2013.Investor Activity in 2012Of the investors surveyed, 49% hadmade at least one private real estatefund commitment during 2012. Thelevel of new investment activity seen in2012 differed by geographic location, asseen in Fig. 7.12. Asia-based institutionswere the most active in 2012, with 86%of those surveyed by Preqin committingto private real estate funds during thisperiod, compared with 48% of NorthAmerica-based investors and 45% ofEurope-based institutions. Institutionalinvestors based in Asia have becomemore important sources of capital for thereal estate asset class over the last fewyears. A shift in investor attitudes andchanging regulations has allowed manyAsia-based institutions to move awayfrom traditional investments to focusmore on alternative investments, and asa result many institutions based in theregion are investing more capital in thereal estate asset class.Prospects for 2013Investor appetite for private real estatehas grown over the course of 2012,with the proportion of investors likelyto commit to private real estate now ata higher level than at any point sinceJanuary 2010, increasing from 36% inJanuary 2012 to 53% in January 2013(Fig. 7.13).This growth in appetite followed a periodof decline from January 2010 to January2012 in the proportion of investorsthat expected to make commitments.The results suggest that investors arestarting to regain confidence in the assetclass and, as a result, fundraising mayincrease in 2013.Investors based in Asia are again set tobe the most active, with 83% expectingto make new commitments in 2013(Fig. 7.14), a similar proportion to thenumber that invested in private realestate funds in 2012. Forty-eight percentof investors surveyed based in NorthAmerica were planning to commit toprivate real estate funds in 2013. Thirty-nine percent of Europe-based investorsinterviewed said that they would investin private real estate funds in 2013,while a further 9% based in the regionremain undecided as to whether they willInvestor Appetite forPrivate Real Estate in 201348% 45%86%52% 55%14%0%10%20%30%40%50%60%70%80%90%100%North America Europe AsiaDid NotCommit in2012Committedin 2012Fig. 7.12: Proportion of Investors that Committed to Private Real Estate Funds in 2012 byInvestor LocationProportionofRespondentsSource: Preqin Investor Outlook: Real Estate, H1 2013Investor Location47% 45%36%48%53%15%6%11%17% 7%38%49%53%36%40%0%10%20%30%40%50%60%70%80%90%100%Jan-10 Jan-11 Jan-12 Sep-12 Jan-13Unlikely toMake NewCommitmentsUndecidedLikely toMake NewCommitmentsFig. 7.13: Investor Intentions for Private Real Estate Investments in the Following 12 Months,January 2010 - January 2013ProportionofRespondentsSource: Preqin Investor Outlook: Real Estate, H1 2013Real Estate Online features detailedprofiles of over 3,500 investors,including current fund searchesand open mandates, direct contactdetails, and more.Data Source:
    • SectionTen:RealEstateDebtFundMarketalternative assets. intelligent data.10. Real Estate Debt Fund Market41The 2013 Preqin Global Real Estate Report - Sample PagesRecent years have seen debt fundsfeature more prominently in the privatereal estate industry, with many firmsdiversifying their businesses to includespecialist debt platforms and a growingnumber of fund managers incorporatingthe acquisition or origination of realestate debt into their existing investmentstrategies. As the availability of bankfinancing has fallen in the US and Europe,many fund managers, alongside othernon-traditional lenders, are increasinglystepping in to help fill the funding gap.Institutional investors are alsoincreasingly interested in the value thatreal estate debt can add to their existingreal estate portfolios. A growing numberof institutions believe that these fundscan generate returns with a lower levelof risk than equity investments in realestate, and a significant number ofinvestors plan to commit to funds with adebt strategy in 2013. Thirty-four percentof real estate investors interviewed byPreqin in December 2012 were targetingdebt funds in the following 12 monthscompared to just 8% in the 12 monthsfollowing December 2011.Solely Debt-Focused FundraisingThe most successful year in terms offundraising for solely debt-focused fundswas 2008, with 33 solely debt-focusedfunds raising an aggregate $13.8bn(Fig. 10.1). Fundraising has beenslower since then and while 2011 was arelatively successful year, with 19 solelydebt-focused funds raising an aggregate$7.8bn, 2012 saw only eight solely debt-focused funds close on an aggregate$2.9bn.Although the proportion of capitalraised by solely debt-focused fundshas fluctuated in recent years, demandfor debt exposure has consistentlyincreased. Fig. 10.3 shows that theproportion of capital raised by fundssolely making equity investments hasdecreased considerably in the last fiveyears, with a growing proportion offunds incorporating debt investmentsto some extent. Since 2007 there hasbeen a large decrease in the proportionReal EstateDebt Fund Market143317121985.113.86.42.07.82.9051015202530352007 2008 2009 2010 2011 2012No. of FundsClosedAggregateCapital Raised($bn)Fig. 10.1: Annual Solely Debt-Focused Closed-End Private Real Estate Fundraising,2007-2012Source: Preqin Real Estate OnlineFund Firm Geographic Focus Size (mn)Blackstone Real Estate Special Situations Fund II Blackstone Group US 2,900 USDFortress Japan Opportunity Fund II Fortress Investment Group Japan 130,000 JPYCRE Senior 1 AXA Real Estate Europe 1,000 EURPramerica Real Estate Capital I Pramerica Real Estate Investors UK, Germany 492 GBPPrudential U.S. Real Estate Debt Fund Pramerica Real Estate Investors US 805 USDM&G Real Estate Debt Fund M&G Investments West Europe 343 EUREuropean Real Estate Debt Fund DRC Capital Europe 300 GBPSelene Residential Mortgage Opportunity Fund II Selene Investment Partners US 476 USDLongbow UK Real Estate Debt Investments II ICG-Longbow UK 242 GBPCornerstone Enhanced Mortgage Fund Cornerstone Real Estate Advisers North America 315 USDFig. 10.2: 10 Largest Solely Debt-Focused Closed-End Private Real Estate Funds Closed, 2011-2012Source: Preqin Real Estate OnlineYear of Final CloseData Source:Subscribers to Preqin’s Real EstateOnline can view detailed profilesfor over 350 firms globally with aninterest in investing in real estatedebt.For more information, or to registerfor a demonstration, please visit:www.preqin.com/reo
    • 2013 Preqin Global Alternatives ReportsPayment Details:Credit CardVisaAmex MastercardCheque enclosed (please make cheque payable to ‘Preqin’)Please invoice meCard Number:Security Code:Name on Card:Expiration Date:American Express, four digitcode printed on the front ofthe card.Visa and Mastercard, lastthree digits printed on thesignature strip.Shipping Details:Name:Address:Firm:Job Title:City:Telephone:Post/Zip:Country:Email:I would like to purchase:The 2013 Preqin Global Alternatives Reports are the most comprehensive reviews of the alternatives investment industry everundertaken, and are a must have for anyone seeking to understand the latest developments in the private equity, hedge fund,real estate and infrastructure asset classes.Key content includes:• Interviews and articles from the most important people in the industry today.• Detailed analysis on every aspect of the industry with a review of 2012 and predictions forthe coming year.• Comprehensive source of stats - including fundraising, performance, deals, GPs,secondaries, fund terms, investors, placement agents, advisors, law firms.• Numerous reference guides for different aspects of the industry - Where are the centresof activity? How much has been raised? Where is the capital going? Who is investing?What are the biggest deals? What is the outlook for the industry?alternative assets. intelligent data.Completed Forms:Post (address to Preqin):One Grand Central Place60 E 42nd StreetSuite 2544, New YorkNY 10165Equitable House47 King William StreetLondon, EC4R 9AFOne Finlayson Green#11-02Singapore 049246303 Twin Dolphin DriveSuite 600Redwood CityCA 94065Fax:+1 440 445 9595+44 (0)870 330 5892+65 6491 5365+1 440 445 9595Email:info@preqin.comTelephone:+1 212 350 0100+44 (0)20 7645 8888+65 6305 2200+1 650 632 4345Name 1 Copy 2 Copies(10% saving)5 Copies(25% saving)10 Copies(35% saving)Data Pack*(Please Tick)Private Equity $175/£95/€115 $315/£170/€205 $655/£355/€430 $1,135/£620/€750Hedge Funds $175/£95/€115 $315/£170/€205 $655/£355/€430 $1,135/£620/€750Real Estate $175/£95/€115 $315/£170/€205 $655/£355/€430 $1,135/£620/€750Infrastructure $175/£95/€115 $315/£170/€205 $655/£355/€430 $1,135/£620/€750All Titles (25% Saving!) $525/£285/€345 $945/£510/€620 $1,965/£1,065/€1,290 $3,410/£1,850/€2,240* Data Pack Costs:$300/£180/€220 forsingle publication**Enterprise Licenceallows for unlimiteddistribution withinyour firm.For more information visit: www.preqin.com/reportsName Single-User Licence  Enterprise Licence** Data Pack*(Please Tick)Private Equity $175/£95/€115 $1,000/£550/€660Hedge Funds $175/£95/€115 $1,000/£550/€660Real Estate $175/£95/€115 $1,000/£550/€660Infrastructure $175/£95/€115 $1,000/£550/€660All Titles (25% Saving!) $525/£285/€345 $3,000/£1,650/€1,980PRINT:DIGITAL:If you would like to order morethan 10 copies of one title,please contact us for a special rate.(Shipping costs will not exceed a maximum of $60 / £15 / €37 perorder when all shipped to same address. If shipped to multipleaddresses then full postage rates apply for additional copies)Shipping Costs: $40/£10/€25 for single publication$20/£5/€12 for additional copiesalternative assets. intelligent data.ISBN: 978-1-907012-53-2$175 / £95 / €115www.preqin.com2013 Preqin GlobalInfrastructureReportalternative assets. intelligent data.ISBN: 978-1-907012-53-2$175 / £95 / €115www.preqin.com2013 Preqin GlobalHedge FundReportalternative assets. intelligent data.ISBN: 978-1-907012-53-2$175 / £95 / €115www.preqin.com2013 Preqin GlobalReal EstateReportalternative assets. intelligent data.ISBN: 978-1-907012-53-2$175 / £95 / €115www.preqin.com2013 Preqin GlobalPrivate EquityReport