Competiiton forces slip in real estate AUM
The world’s 500 biggest fund managers reported a fall of 13.2% in real estate assets under management in 2015, according to a study by Willis Towers Watson.
Total AUM, including property and all assets, fell by 1.7% to $76.6trn (£63.1trn). Real estate posted the biggest fall.
Paul Jayasingha, senior investment consultant at Willis Towers Watson, said: “If you go back a long way, real estate was the default choice for alternatives. It was the simplest to understand and it was easier for institutional investors to invest in.
[caption id="attachment_865847" align="alignright" width="200"] Paul Jayasingha[/caption]
The world’s 500 biggest fund managers reported a fall of 13.2% in real estate assets under management in 2015, according to a study by Willis Towers Watson.
Total AUM, including property and all assets, fell by 1.7% to $76.6trn (£63.1trn). Real estate posted the biggest fall.
Paul Jayasingha, senior investment consultant at Willis Towers Watson, said: “If you go back a long way, real estate was the default choice for alternatives. It was the simplest to understand and it was easier for institutional investors to invest in.
“But today there’s infrastructure, agriculture, hedge funds and private equity. Real estate is competing with other illiquids and other asset classes out there.”
He stressed that the data from the study could have random sampling errors because some fund managers, such as Blackstone, which has more than $100bn in property AUM, did not give a sector-based breakdown of their assets.
Jayasingha said that despite the falls in assets under management, real estate had become attractive in the past year, particularly in Europe, where low and negative interest rates have made returns on property relatively strong.
