INREV real estate funds' universe expands to near 500 in Q1
Friday 27 June 2008
The number of non-listed real estate funds captured by INREV’s Vehicles Database hit 484 in the first three months of 2008, up from 476 in the final quarter of last year, with 11 new vehicles coming to the market over this period, the industry association’s latest Quarterly Research Report shows.
The gross asset value (GAV) of the INREV funds universe declined, however, to €297.6 billion in the first quarter from €317.2 billion in the previous three months, due largely to the withdrawal of contributed data from some large German open-ended retail funds.
In total, 42 new funds were added to the INREV Vehicles Database and 36 funds were dropped mainly due to fund terminations and improvements to the database following changes in the inclusion requirements.
“We’re pleased that the numbers of managers with institutional real estate funds contributing their data to INREV continues to rise. We have also continued to improve the quality of the data, which is of benefit to members on a day-to-day basis and as well as supporting INREV’s ongoing research programme,” INREV Research Director Andrea Carpenter commented.
The database analysis shows that the most significant change in the first quarter occurred within the core and value added styles. Within core funds, 17 vehicles representing €4.7 billion of GAV were added, while 25 funds representing €31.3 billion of GAV were removed. Within the value added fund style, 22 vehicles representing €5.4 billion of GAV were added, while seven funds representing €2.89 billion of GAV were removed.
INREV’s Quarterly Research Report also features an article on the risks of using leverage in property funds written by Maarten van der Speck and Chris Hoorenman of ING Real Estate Investment Management, Europe. The article examines the effects that financial leverage has on some of the most important factors in investment allocation decisions, which could result in underestimating portfolio risk.
“The article shows that leverage is beneficial for investors with a long-term investment horizon, but that they should always consider the extra risk involved and determine if they are in a position to sit out a short-term crisis,” said Carpenter.
The final part of the report is the publication of the results of the annual INREV/EuroProperty Fund Manager Survey. It gives an overview of the size and strategy of 95 fund managers active in Europe that together represent €955 billion in global property assets under management.
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