Real Estate Spotlight

Real Estate Spotlight is the monthly newsletter published by Preqin Real Estate Spotlight packed full of vital information and data, all based on our latest research September 2015 into the private equity real estate industry. Real Estate Spotlight combines information from our online service Real Estate Online. Feature Article

Investor Views: Real Estate Attractive Despite Pricing Concerns

September 2015 Using information from the recently released Preqin Investor Outlook: Alternative Assets, H2 Volume 9 - Issue 6 2015, Preqin explores institutional investors’ objectives, satisfaction with returns and activity within the real estate asset class. Page 2 FEATURED PUBLICATION: Lead Article Preqin Investor Outlook: Alternative Assets, H2 2015 The Private Real Estate Industry in France

This month we provide a detailed overview of the real estate industry in France, including Preqin Investor Outlook: fundraising, fund managers and investors. Page 5 Alternative Assets H2 2015

Preqin Industry News

We take a look at distressed private real estate funds in market and investors targeting Private Equity Hedge Funds Real Estate Infrastructure Private Debt new fund commitments. Page 9

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More from Preqin: New Real Estate Research To find out more, or to download your copy, please visit: See what’s new from Preqin this month in the real estate universe. Page 11 www.preqin.com/investoroutlook On the Network

New York: We examine the activity of investors on Preqin Investor Network to see which fund strategies One Grand Central Place and geographic regions are of current interest to investors, as well as which institutional 60 E 42nd Street investor types have been proactively looking at funds in July. Page 13 Suite 630 New York, NY 10165 The Facts +1 212 350 0100 Distressed Private Real Estate Fundraising - Latest statistics for 2015 YTD. Page 15 London: 3rd Floor, Vintners’ Place UK-Based Real Estate Investors - Allocations, preferences and future plans. Page 17 68 Upper Thames Street London Conferences - Upcoming real estate conferences around the world. Page 19 EC4V 3BJ +44 (0)203 207 0200

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Investor Views: Real Estate Attractive Despite Pricing Concerns

Using information from the recently released Preqin Investor Outlook: Alternative Assets H2 2015, Preqin explores institutional investors’ objectives, satisfaction with returns and activity within the real estate asset class.

Investor Objectives for Real Estate Fig. 1: Investors’ Main Reasons for Investing in Real Estate

A diverse range of institutional investors choose to invest in the Diversification 65% real estate asset class, each with their own set of objectives. Fig. 1 shows that there are a multitude of reasons that surveyed investors Inflation Hedge 61% place above returns as their main motivation. The diversifi cation benefi ts of real estate were cited by the largest proportion of Reliable Income Stream 54% respondents, most likely due to the asset class’s relatively low Low Correlation to Other Asset 45% correlation to traditional asset classes and the diversity of property Classes types, strategies and locations available on the market. Large proportions of surveyed investors also choose to invest in real Reduce Portfolio Volatility 32% estate because of its infl ation hedging properties and the asset class’s ability to generate a predictable and reliable income stream. High Risk-Adjusted Returns 32%

With only 16% of respondents choosing high absolute returns as High Absolute Returns 16% their main reason for investment, it is unsurprising that the majority 0% 20% 40% 60% 80% of surveyed investors (60%) target absolute returns of less than 10%, with this proportion rising to 80% for investors targeting less Proportion of Respondents than 12% (Fig. 2). While investor attitudes towards risk differ based Source: Preqin Investor Interviews, June 2015 on the tolerance of the distinct institution, real estate does offer opportunities for investment across the risk spectrum, with 13% of Investor satisfaction with the asset class has continued to grow; respondents seeking high absolute returns of 14% or more. 39% of investors surveyed in June felt that the performance of their real estate portfolios exceeded their expectations, up from Satisfaction with Returns 33% in December 2014 and 3% in December 2012. Furthermore, investors’ conﬁ dence in real estate’s ability to achieve portfolio Encouragingly, the majority (57%) of surveyed investors have a objectives over the last 12 months has remained stable; over positive perception of the real estate asset class at present, a large three-quarters (77%) of investors have seen no change in the last change in sentiment from the 37% that felt this way in December year, while 10% have gained conﬁ dence in the asset class. This 2014 (Fig. 3). However, 6% have a negative perception of the continued satisfaction in the real estate asset class has led to over industry at present, while none stated this at the end of 2014. a quarter (26%) of investors expecting to invest more capital in private real estate over the next year compared with the previous 12 months, while 52% expect to maintain the same level of capital commitments. Fig. 2: Investors’ Targeted Annualized Absolute Returns for Fig. 3: Investors’ General Perception of the Real Estate Real Estate Industry at Present, December 2014 - June 2015

30% 100% 25% 25% 90% 23% 20% 80% 37% 20% 57% 70% Positive 15% 12% 60% Neutral 10% 8% 7% 50% 5% 4% 40% Negative 1% Proportion of Respondents 0% 0% 0% 0% 63% 0% 30% 37%

Proportion of Respondents 20% 2-3% 4-5% 6-7% 8-9%

10-11% 12-13% 14-15% 16-17% 18-19% 10% 20-21%% 6% 22% or More Less than 2% 0% 0% Dec-14 Jun-15 Targeted Annualized Absolute Returns Source: Preqin Investor Interviews, June 2015 Source: Preqin Investor Interviews, December 2014 - June 2015

Interrelated issues are the key concerns of investors at the which they are based. However, investors in all regions are looking beginning of H2; infl ated asset prices, a highly competitive deal to expand their exposure to non-domestic markets in the next 12 environment and concerns over the eventual performance of real months. North America-based investors favour greater geographic estate vehicles were chosen by 63%, 37% and 30% of surveyed diversifi cation, and demonstrate the greatest level of interest in real estate investors respectively (Fig. 4). Macroeconomic targeting global opportunities. uncertainty and volatility in global markets are also on the minds of investors, with 24% indicating this is a key issue for private real Outlook estate in 2015. There is a general sense of satisfaction among real estate Exposure to Real Estate investors, with the majority holding a positive perception of the asset class and believing that their private real estate investments Many investors will increase their exposure to the real estate asset have met or exceeded their expectations in the previous year. class over the next 12 months; 78% of surveyed investors expect Positive sentiment is driving further investment in the asset class to commit the same amount of capital, or more, to real estate in the in the short term and further growth in the asset class is expected next 12 months compared with the previous year (Fig. 5). In the over the long term as more investors are planning to increase their longer term, over half (55%) of respondents will look to maintain allocations than reduce them. their allocations to real estate. However, further growth in the asset class is expected as more investors are planning to increase their Also contributing to investor satisfaction is the alignment of allocations than reduce them. interests between investors and fund managers. However, a large proportion of investors have decided not to invest in a fund due to While California Public Employees’ Retirement System (CalPERS) the proposed terms and conditions, indicating fund managers need has made headlines with moves to reduce the number of managers to be sure they are aligned with market rates or can effectively in its portfolio, this does not appear to refl ect a widespread trend. justify the fees they charge if they want to ensure these issues are The majority (60%) of investors are looking to maintain the number not an obstruction in gaining commitments from investors. of fund manager relationships they currently have, while a greater proportion of investors (29%) are looking to increase the number However, investors are still concerned about a range of interrelated of fund manager relationships they hold in comparison to those issues including valuations, deal fl ow and performance. How fund looking to reduce them (11%). managers address and mitigate these concerns could be the differentiator in a successful fundraise within the highly competitive Strategies and Regions Targeted fundraising environment.

Value added, core and opportunistic remain the most favoured Data Source strategies in the next year, with core funds being targeted by the same proportion of investors (54%) as value added strategies. This article features extracts from the recently released There has been a noticeable decline in investors’ preference Preqin Investor Outlook: Alternative Assets, H2 2015, for distressed funds, suggesting that the strategy type is not as which provides a unique and in-depth look at the appetite, appealing as in previous years, possibly due to a more stable plans, expectations and concerns of institutional investors macroeconomic environment and the deleveraging process in private equity, hedge funds, real estate, infrastructure and undertaken by banks reducing the number of viable distressed private debt. opportunities in comparison to few years ago. For more information on this report, please visit: As expected, the majority of investors looking to make commitments in the next 12 months have a strong domestic bias, with investors www.preqin.com/investoroutlook much more likely to deploy capital to opportunities in the region in Fig. 5: Investors’ Expected Capital Commitment to Private Fig. 4: Investors’ Views on the Key Issues for the Private Real Real Estate Funds in the Next 12 Months Compared to the Estate Market over the Next 12 Months Last 12 Months

Valuations 63%

Deal Flow 37%

Performance 30% 22% More Capital in Next Ongoing Volatility and 26% 12 Months than Last Uncertainty in Global Markets 24% 12 Months Availability and Pricing of Debt Financing 21% Same Amount of Fulfilling Investor Demands 21% Capital in Next 12 Exit Environment 20% Months as in Last 12 Months Fee Pressure 17% Less Capital in Next 12 Transparency 16% Months than Last 12 Months Due Diligence 14%

Regulation 14% 52% 0% 10% 20% 30% 40% 50% 60% 70% Proportion of Respondents Source: Preqin Investor Interviews, June 2015 Source: Preqin Investor Interviews, June 2015

3 Real Estate Spotlight / September 2015 © 2015 Preqin Ltd. / www.preqin.com Global Infrastructure & ASK 2015 Real Estate Summit Oct 21st & 22nd Four Seasons Hotel, Seoul ASK 2015 Global Infrastructure and Real Estate Summit are meeting points and communication hub for both global fund managers and Korean institutional investors who are looking for overseas investment opportunities.

Total AUM of Korean institutions will grow from USD 2tn to approx 5tn over the next 30 years, however the domestic market cannot provide sufficient attractive investment opportunities due to stagnant economic growth and aging society. Korean institutions’ first choice for overseas investment is real estate, followed by private equity, infrastructure, hedge funds and private debt.

As Korean institutions are allocating 60-80% to fixed income with low return, they are looking for alternatives to diversify and enhance return. Finding alternatives to fixed income is the key theme of the summit.

As most Korean investors are still at the early stage of overseas investment, this summit program provides an overview of various strategies and regions for both infrastructure and real estate. Because ASK provides this insight, it is well regarded for its high attendance from Korean investors. There were 600 participants including 313 investors and 170 global managers and others in November 2014.

For queries please contact IK Song [email protected] www.asksummit.co.kr Lead Article The Private Real Estate Industry in France Download Data The Private Real Estate Industry in France Preqin examines the private real estate landscape in France, including fundraising, fund managers and investors.

Fundraising Fund Managers

Preqin’s Real Estate Online features in-depth information on 21 The largest proportion of France-focused funds (62%) and capital solely France-focused private real estate funds closed since 2007, (69%) since 2007 were raised by fund managers headquartered including information on strategy and geographic preferences, in France (Fig. 5). Aside from France itself, UK-headquartered fundraising data, known investors and the managers’ performance managers have raised the greatest number of France-focused track records. Fundraising between 2007 and 2012 was fairly vehicles, with fi ve funds having closed raising €1.3bn. consistent, with only 2011 standing out in terms of capital raised that year (Fig. 2). No solely France-focused funds closed in 2013; Nearly all (93%) of the 28 France-based real estate fund managers however since then, fundraising in the country has bounced back tracked by Preqin’s Real Estate Online are based in Paris, with and surpassed any amount raised pre-2013. With just under half only two fi rms based outside the capital, located in Marseille. a year remaining, 2015 could be a record year for France-focused Collectively, these fi rms have raised over $23bn in closed-end private real estate funds. private real estate funds in the last 10 years, and they currently have an estimated $10.2bn available to invest. AXA Real Estate Higher risk value added and opportunistic strategies focusing on is the largest contributor to these fi gures, raising 61% of the France secured similar proportions of capital to lower risk core and aggregate capital in the last 10 years and holding 71% of the dry core-plus funds, despite higher risk strategies representing 48% of powder available to France-based managers (Fig. 7). total funds closed since 2007 (Fig. 3). Nearly half of funds reaching a fi nal close since 2007 target a diversifi ed range of properties, with a notable 29% targeting offi ces (Fig. 4). Fig. 1: Locations of Paris-Based Real Estate Investors and Fund Managers Profiled on Preqin Real Estate Online

Institutional Investors for private real estate funds, with France-based investors less likely to invest than their European counterparts. Nearly half of these Preqin’s Real Estate Online contains detailed information on investors currently hold less than 5% of their total assets in the the 41 France-based institutional investors active in real estate, real estate asset class; however, with 93% maintaining a target including current and target allocations, strategic and geographic allocation of 5% or higher, there could be signifi cant fl ows of capital preferences, past commitments and future investment plans. into real estate in the mid to long term (Fig. 11). As shown in Fig. 8, insurance companies make up the largest proportion (41%) of real estate investors within France, with private As mentioned previously, high- and low-risk France-focused wealth fi rms representing a notable quarter of the population. As private real estate funds have generally secured equal proportions insurance companies are some of the largest investors by assets of capital since 2007, refl ecting the appetite of France-based under management (AUM), it is unsurprising that 71% of France- investors; core, value added, core-plus and opportunistic funds are based investors hold more than €15bn in AUM, including 29% with favoured by 79%, 71%, 64% and 50% of investors respectively. A over €100bn in assets (Fig. 9). clear domestic-bias exists among France-based investors; 87% will invest in private funds focused on their home region, far above the It is interesting that France-based investors frequently focus on proportion that invest in global- (22%) or North America-focused direct investments in comparison to investors based in the rest of (13%) funds (Fig. 13). Europe; 91% of France-based investors will invest directly in real estate, while only 56% do so through this route in other areas of Europe (Fig. 10). This trend is reversed when looking at preferences

Fig. 3: Breakdown of Solely France-Focused Closed-End Fig. 2: Annual Solely France-Focused Closed-End Private Private Real Estate Funds by Primary Strategy 2007 - 2015 YTD Real Estate Fundraising, 2007 - 2015 YTD (As at 29 July 2015) (As at 29 July 2015)

6 40% 36% 35% 5 5 30% 29% Proportion of 25% Funds Closed No. of Funds 25% 24% 4 Closed 20% 19% 17% Proportion of 3 3 15% 14% 3 Aggregate 11% Aggregate 10% Capital Raised Capital Raised 10% 8% 2222 2 (€bn) Proportion of Total 5% 2 5% 3% 1.3 1.2 1.0 0% 1 0.5 0.6 Debt 0.2 0.2 Core 0.0 0 0.0 0 Core-Plus 2007 2008 2009 2010 2011 2012 2013 2014 2015 Distressed Opportunistic YTD Value Added Year of Final Close Primary Strategy Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 4: Breakdown of Solely France-Focused Closed-End Fig. 5: Breakdown of Solely France-Focused Closed-End Private Real Estate Funds by Primary Property Focus, 2007 - Private Real Estate Fundraising: International vs. Domestic 2015 YTD (As at 29 July 2015) Fund Managers, 2007 - 2015 YTD (As at 29 July 2015)

100% 90% 5% 5% 80%

5% Diversified l 70% 62% 5% Office 69% Domestic Fund 60% Managers Industrial 5% 50% 48% Land 40% International Niche Fund Managers 30% Proportion of Tota Residential 20% 38% 31% Retail 29% 10% 0% Proportion of Proportion of No. of Funds Aggregate Capital Raised

Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 6: Five Largest Solely France-Focused Private Real Estate Funds Closed, 2013 - 2015 YTD (As at 29 June 2015)

Fund Firm Firm Headquarters Final Size (mn) Final Close Date Fonds de Logement Intermédiaire AMPERE Gestion France 1,045 EUR 30-Jun-15 InfraRed Active Real Estate Fund III InfraRed Capital Partners UK 475 GBP 19-Nov-14 LFP Créances Immobilières La Française Real Estate Managers France 280 EUR 31-Mar-14 Weinberg Real Estate Partners #2 Weinberg Capital Partners France 200 EUR 17-Jun-14 Club Immo Santé Swiss Life REIM (France) France 190 EUR 31-Dec-14

Source: Preqin Real Estate Online

Fig. 7: Top Five France-Based Real Estate Firms by Aggregate Capital Raised for Closed-End Funds in the Last 10 Years

Firm Headquarters Total Capital Raised in Last 10 Years (€mn) Estimated Dry Powder (€mn) AXA Real Estate Paris, France 11,301 6,409 AEW Europe Paris, France 2,617 814 AMPERE Gestion Paris, France 1,045 890 Altarea Cogedim Paris, France 600 250 Amundi Real Estate Paris, France 378 11

Source: Preqin Real Estate Online

Fig. 8: Breakdown of France-Based Real Estate Investors by Fig. 9: Breakdown of France-Based Real Estate Investors by Type Assets under Management

35% Insurance Company 30% 29% 29% 5% 3% Family Office 5% 25% 8% Public Pension Fund 20% 41% Wealth Manager 15% 13% 13% 13% 10% Bank 10%

Asset Manager Proportion of Investors 5% 3% 13% Private Sector Pension Fund 0% 15% Less than €2.5-4.9bn €5-14.9bn €15-49.9bn €50-99.9bn €100bn or Government Agency €2.5bn More Assets under Management Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 10: Breakdown of France-Based and Rest of Europe- Fig. 11: Distributions of France-Based Investors’ Current and Based Real Estate Investors by Route to Market Target Allocations to Real Estate

100% 60% 57% 91% 90% 50% 80% 69% 70% 40% France-Based 36% 60% 56% Current 53% Allocation 30% 28% 29% 50%

40% Target 35% Rest of 20% Allocation 30% Europe-Based 23% Proportion of Investors 12% 12% 12% Proportion of Investors 20% 10% 7% 7%

10% 0% 0% 0% Less than 2.5 - 4.9% 5 - 7.4% 7.5 - 9.9% 10% or Direct Listed Private Funds 2.5% More Route to Market Allocation to Real Estate (As a % of AUM) Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 12: Strategy Preferences of France-Based Real Estate Fig. 13: Geographic Preferences of France-Based Real Investors Estate Investors

90% 90% 87% 80% 79% 71% 80% 70% 64% 70% 60% 50% 50% 60% 40% 50% 30% 29% 29% 29% 40% 20% 14%

Proportion of Investors 30% 10% 22%

0% Proportion of Investors 20% 13% 13% 13% 10% Debt Core 0% Core-Plus Distressed Europe Global Asia North Emerging Secondaries Opportunistic Value Added America Markets Fund of Funds Strategy Preference Geographic Preference Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 14: Sample of France-Based Investors Planning New Commitments

Investor Type Investment Plans for the Next 12 Months Plans to commit €200mn to ﬁ ve US-focused core private real estate funds in the CNP Assurances Insurance Company next 12 months. Looking to commit €50-80mn across four to ﬁ ve private and listed real estate funds UMR Corem Public Pension Fund in the next 12 months. Expects to invest €40mn in Europe-focused opportunistic private real estate funds Le Conservateur Insurance Company in the next year.

Source: Preqin Real Estate Online

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FOROFF 13th REAL ESTATE PRIVATE EQUITY OCTOBER 20 & 21, 2015 SUMMITNEW YORK KEY TOPICS TO BE COVERED INCLUDE: KEYNOTE INTERVIEW: s3UCCESSFULLYnavigatingAMARKETfull of capital s-ANAGINGTHEinﬂ ux of foreign capital Successfully s(OWLPsARESLICINGANDDICINGASSETSTOREALIZETHEIRINVESTMENTOBJECTIVES s4HESCOPEOFinnovative ﬁ nancing options OFFEREDBYNON BANKLENDERS Navigating A Market s)MPACTOF capital markets ONREALESTATETRANSACTIONS Full Of Capital s/PTIMALPRODUCTTYPESANDGEOGRAPHIESINTHEsecondary markets s3TABILIZINGYIELDSANDENSURINGCONSTANTTURNOVERWITHalternative assets REGISTER TODAY AT www.iglobalforum.com/repe13 @iglobalforum /iglobalforum /iglobalforum News Preqin Industry News Download Data

Preqin Industry News

Oliver Senchal takes a look at distressed private real estate funds in market and investors targeting new fund commitments.

Distressed Private Real Estate Funds in Market Real Estate Spotlight – September 2015: As can be seen on page 13, fundraising for distressed private In Numbers real estate vehicles has been in decline since 2013; however, the pipeline for these funds appears strong. There are currently 17 With this month’s lead article focusing on the private real closed-end private real estate funds in market primarily focused estate industry in France (see page 5), we look at some on distressed real estate, targeting $7.5bn in institutional capital of the key figures on this market. commitments. The largest of these is Oaktree Real Estate Opportunities Fund VII, which is targeting $3.5bn for investment in assets on a global basis, with an emphasis on investments in high 441%1% Proportion of France-based real estate growth markets in the US. The fund, managed by Oaktree Capital investors classified as insurance companies. Management, will focus on distressed opportunities primarily in real estate debt and restructurings, which will involve investments oriented around value, rescue capital and distress-for-control opportunities throughout the real estate down cycle. Size of the largest solely France-focused €€1.0bn1.0bn fund to close since 2013, Fonds de Of the 17 funds in market, only two funds are managed by real Logement Intermédiaire. estate ﬁ rms outside the US. Germany-based Albulus Advisors Germany is seeking €200mn for Albulus Distressed Opportunities Fund I, while UK-based Revetas Capital is also targeting €200mn Number of institutional real estate investors for distressed, under-performing and under-valued real estate 4411 based in France profiled on Real Estate investments with special circumstances that provide the potential Online. for capital appreciation through active management within Central and Eastern Europe.

Investors Targeting New Fund Commitments Proportion of France-based real estate 991%1% investors targeting direct real estate. With this month’s feature article (page 2) examining investor activity in the next 12 months, we look at a sample of institutional investors targeting private real estate funds over the next year. Springﬁ eld- Total capital raised for closed-end funds in based Teachers’ Retirement System of the State of Illinois will the last decade by Paris-based AXA Real commit up to $850mn to private real estate over the next year, with €€14.5bn14.5bn Estate, the highest amount of any private $500mn dedicated to opportunistic real estate funds, $250mn to real estate fund manager in the country. value added strategies and $100mn earmarked for co-investment opportunities.

Denmark-based insurance company PFA Pension will commit Looking for more information on investors planning to €600mn across two to four private real estate funds in the next 12 make new commitments to real estate funds? months, seeking core, value added and opportunistic vehicles that target assets across Asia, Europe and the US. South Korea-based Preqin’s Real Estate Online service features detailed Local Finance Association will commit $100mn to domestic- and profiles of over 5,000 active investors in real estate. Use overseas-focused private real estate funds in the next 12 months, the Fund Searches and Mandates tool to pinpoint those with an interest in funds targeting mega malls. institutions that are seeking fund investments right now.

To learn more about how Preqin’s real estate data can help you, please visit:

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Do you have any news you would like to share with the readers of Spotlight? Perhaps you’re about to launch a new fund, have implemented a new investment strategy, or are considering investments beyond your usual geographic focus?

Send your updates to [email protected] and we will endeavour to publish them in the next issue.

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WomensAlternativeInvestmentSummit.com | T: + 1 781.652.0900 | [email protected] More from Preqin New Real Estate Research Download Data

More from Preqin: New Real Estate Research

In addition to our Spotlight newsletters and publications, Preqin also publishes special reports and daily blogs covering all alternative asset classes. Read on to see what’s new from Preqin this month in the real estate universe.

Blog of the Month  Does Fund Manager Location Affect Private Real Estate Fund Performance? – August 2015

Preqin’s Real Estate Online service currently tracks 1,356 private real estate funds with net-to-LP performance data, with 865 of vintage years 2004-2012. This blog will examine the median net IRRs of real estate vehicles managed by fund managers in three major cities: London, New York and San Francisco, to investigate whether fund manager location affects the performance of private real estate funds…

Click here to read the full blog by Chloe Wong.

To view the full archive of Preqin blogs, please visit: www.preqin.com/blog

New Research

Preqin Investor Outlook: Raising Real Estate Capital Alternative Assets, H2 2015 in Boston

The Facts Raising Real Estate Capital in Boston alternative assets. intelligent data.

Raising Real Estate Capital in Boston

Preqin’s Real Estate Online provides comprehensive profi les on The typically lower assets under management of Boston-based the 49 institutional investors based in Boston that actively invest in investors restricts the number of investors that can target certain the real estate asset class, collectively representing over $1.1tn in routes to market, with the large majority of investors investing Preqin Investor Outlook: assets under management. The highest proportion of institutional through private real estate funds and a relatively small proportion investors are foundations, representing a quarter of investors targeting direct investment (Fig. 5). For this reason, Boston-based located in the city (Fig. 2). Boston has a strong private wealth investors have less appetite for separate account structures industry; a fi fth of real estate investors based in Boston are wealth compared with the rest of the US real estate investor community Alternative Assets managers and a further 14% are family offi ces. (Fig. 7). However, the majority of Boston-based real estate are more open to investing through co-investment opportunities (55%) With many smaller investors in terms of assets under management or through joint ventures (57%) compared to all US investors. H2 2015 (AUM) such as foundations, endowments and private wealth fi rms, 42% of institutional investors have AUM of less than $1bn, with Higher risk strategies are largely favoured by Boston-based 71% holding less than $2.5bn in assets (Fig. 3). The majority of real investors; 93% and 70% of investors target value added and estate investors are under-allocated to the asset class; 44% hold opportunistic funds respectively, while only 33% and 30% target less than 5% of their AUM in real estate, while 88% have target core-plus and core real estate funds respectively (Fig. 9). There is allocations above 5%, indicating there is potential for signifi cant also a strong domestic bias for Boston-based institutions; 93% will capital fl ows to the asset class in the mid to long term as these invest in vehicles targeting their home continent (Fig. 10). investors look to move closer to their strategic targets (Fig. 4).

Fig. 1: Location of Boston-Based Real Estate Investors and Fund Managers Profiled on Preqin Real Estate Online

Private Equity Hedge Funds Real Estate Infrastructure Private Debt

This report provides a unique and in-depth look at the In this factsheet, we take a detailed look at institutional appetite, plans, expectations and concerns of institutional investors based in Boston, including where they are based, investors in private equity, hedge funds, real estate, assets under management, current and target allocations to infrastructure and private debt. This report presents the views real estate, future plans and more. of more than 460 surveyed institutions alongside the in-depth data for more than 12,500 investors available to users of Preqin’s industry-leading online services. Download a copy Download a copy

For more free research from Preqin available to download now, please visit our Research Center. Already a member? Login for access to Research Center Premium.

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Fund Coverage: Funds 44,856 900 Infrastructure Funds 5,323 PE Real 17,854 Private Equity* Funds 18,940 Hedge Funds Estate Funds 1,839 Private Debt Funds Firm Coverage: Firms 21,354 457 Infrastructure Firms 2,942 PERE 9,281 PE Firms 7,835 Hedge Fund Firms Firms 839 Private Debt Firms

Performance Coverage: 20,681 Funds (IRR Data for 6,140 Funds and Cash Flow Data for 2,948 Funds) 1,360 196 Infrastructure 6,066 PE Funds 12,388 Hedge Funds PERE Funds 671 Private Debt

Fundraising Coverage: 17,540 Funds Open for Investment/Launching Soon Including 2,599 Closed-Ended Funds in Market and 343 Announced or Expected Funds 947 250 Infra. Funds 1,979 PE 14,089 Hedge Funds PERE Funds Funds 275 Private Debt Funds Deals Coverage: 144,046 Deals Covered; All New Deals Tracked

43,085 Buyout Deals** 89,415 Venture Capital Deals*** 11,546 Infra. Deals

Investor Coverage: 13,368 Institutional Investors Monitored, Including 9,340 Verified Active**** in Alternatives and 98,314 LP Commitments to Partnerships

5,028 Active Hedge 2,507 Active 1,666 Active 5,940 Active PE LPs 5,026 Active RE LPs Fund Investors Infra. LPs Private Debt Investors Alternatives Investment Consultant Coverage: 507 Consultants Tracked Fund Terms Coverage: Analysis Based on Data for Around 12,660 Funds Best Contacts: Carefully Selected from Our Database of over 330,953 Active Contacts

Plus The Preqin Difference - Over 200 research, support and development staff Comprehensive coverage of: - Global presence - New York, London, Singapore and San - Placement Agents - Dry Powder Francisco - Fund Administrators - Compensation - Depth and quality of data from direct contact methods - Law Firms - Plus much more... - Unlimited data downloads - Debt Providers - The most trusted name in alternative assets

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*Private Equity includes buyout, venture capital, distressed, growth, natural resources and mezzanine funds. **Buyout deals: Preqin tracks private equity-backed buyout deals globally, including LBOs, growth capital, public-to-private deals, and recapitalizations. Our coverage does not include private debt and mezzanine deals. ***Venture capital deals: Preqin tracks cash-for-equity investments by professional venture capital firms in companies globallyacross all venture capital stages, from seed to expansion phase. The deals figures provided by Preqin are based on announced venture capital rounds when the capital is committed to a company. ****Preqin contacts investors directly to ensure their alternatives programs are active. We emphasize active investors, but clients can also view profiles for investors no longer investing or with programs on hold. News On the Network Download Data

On the Network This Month: What Are Investors Searching For? In this feature, we examine the activity of investors on Preqin Investor Network to see which fund strategies and geographic regions are of current interest to investors, as well as which institutional investor types have been proactively looking at funds in July.

Preqin Investor Network is a free and unique system designed to help investors source and connect with alternative fund managers. Currently over 7,100 individuals at more than 3,700 institutional investors are using the Network to ﬁnd and reach out to over 2,200 private equity, private real estate and private infrastructure funds in market. To ﬁnd out more, please email: [email protected].

Fig. 1: Breakdown of Real Estate Funds Reviewed by Fig. 2: Breakdown of Real Estate Funds Reviewed by Investors on Preqin Investor Network by Primary Strategy, July Investors on Preqin Investor Network by Primary Geographic 2015 Focus, July 2015

0% Value Added 4% 3% 6% 5% Opportunistic 15% 7% North America Debt 38% Europe Core 14% Asia Core-Plus 55%

Distressed Rest of World 24% Fund of Funds

29% Secondaries

Source: Preqin Investor Network Source: Preqin Investor Network Fig. 4: Breakdown of Investors Searching for Real Fig. 3: Breakdown of Investors Searching for Real Estate Estate Funds on Preqin Investor Network by Location of Funds on Preqin Investor Network by Type, July 2015 Headquarters, July 2015

Fund of Funds Manager

Public Pension Fund 6% 10% 7% 2% Insurance Company 4% 26% Private Sector Pension North America 6% Fund Wealth Manager Europe 6% Family Office Asia Asset Manager 30% 57% 7% 12% Rest of World Foundation

8% Sovereign Wealth Fund 10% 10% Endowment Plan

Other

Source: Preqin Investor Network Source: Preqin Investor Network

In Numbers: On the Network This Month

The number of private real estate funds currently in The average size of private real estate funds in market 454 market (as of 20 August 2015). $356mn screened on the Network in July.

Some of the largest private real estate funds have signed up Proportion of all private real estate funds in market to share more information with the Network’s investors. Would 58% reviewed by investors on the Network in July alone. you like to join them and have LPs contacting you for more information? Email us at: [email protected].

INDIA’S EXCLUSIVELY SENIOR REAL ESTATE MEETING

Top Local Developers, Closed Door Global Investors Investors & Lenders Discussions

Participants include:

HRUSHIKESH KAR PARRY SINGH VINEET SEKHSARIA BRIAN ORAVEC GAUTAM HORA VIVEK SOIN MD, Head of Global Co-founder & MD Executive Director CEO & Managing Partner Senior Director Acquisitions Vice President Finance Real Assets RED FORT CAPITAL MORGAN STANLEY REAL INDOSPACE CAPITAL TISHMAN SPEYER WESTCOURT REAL ESTATE JP MORGAN ASSET ESTATE ADVISORS

Since 1998, GRI meetings provide a forum for the world’s leading DISCOVER ALL GRI EVENTS Africa t Asia t Brazil t British t CEE real estate players to develop valuable relationships, find new China t Colombia t Deutsche t Deutsche Wohnen t East Africa t España business partners, and strengthen their global networks. Europe SummittFrancetIndiat ItalytLatin AmericatMENAtMexicotRussiatTurkey

ROB MARTENtSPCN!NZHSJDPN6,5FM XXXHMPCBMSFBMFTUBUFPSH*OEJB

TECH REBOOT SERIES PREQINDISCOUNTCODE 5SE FOROFF 3rd Real Estate CROWDFUNDING

OCTOBER 14th SUMMIT NEW YORK KEY TOPICS THAT WILL BE COVERED: s,EARNTHEstep-by-step process of crowdfunding AGROUND UPDEVELOPMENTORACQUISITIONONBOTHSIDESOFTHEMARKET sLearn how to implement the strategiesINVESTORS DEVELOPERS BROKER DEALERSAND2)!SWHOHAVEFOUNDSUCCESSIN THEINDUSTRYHAVEBEENUSINGFORYOURSELF s/PPORTUNITIESTOinvest in speciﬁ c properties vs. a blind pool portfolio OVERWHICHYOUHAVEVIRTUALLYNOCONTROL s1UESTIONSTOASKWHENchoosing the right platform for youDEBTVEQUITY THEINDIVIDUALVETTINGPROCESS HOWYOURPRIVACYISMANAGED ANDIFTHERESSKININTHEGAME s,EARNHOWTObuild your own online crowdfunding portal USINGAWHITELABELSOLUTION s3TATUSOF2EG! 4ITLE)))UNACCREDITEDCROWDFUNDING COMPLIANCEREQUIREMENTS ANDOTHER developments on the legal & regulatory front s&ACILITATEDOne-on-One Networking, Gala Reception ANDOTHEROPPORTUNITIESTOMEETWITHTHE PLAYERSANDPERSONALITIESSHAPINGTHISINDUSTRY REGISTER TODAY AT iglobalforum.com/crowdfunding3 @iglobalforum /iglobalforum /iglobalforum The Facts Distressed Private Real Estate Fundraising Download Data

Distressed Private Real Estate Fundraising

Lauren Mason takes a detailed look at closed-end distressed private real estate fundraising, including geographic focus, property focus and proportions of target size achieved.

Fig. 2: Closed-End Distressed Private Real Estate Fundraising by Fig. 1: Annual Closed-End Distressed Private Real Estate Primary Geographic Focus, 2013 - 2015 YTD (As at 19 August Fundraising, 2010 - 2015 YTD (As at 19 August 2015) 2015)

25 25 23 23 21 20 19 20 18

No. of Funds No. of Funds 15 15 13.8 12.9 Aggregate Aggregate 10.6 Capital 10 Capital 10 8.3 Raised ($bn) 9 8.4 Raised ($bn) 6 5 5 5 3.9 2 2.4 1 1.1 0.1 0.2 0 0 North Europe Asia Rest of World 2010 2011 2012 2013 2014 2015 YTD America Year of Final Close Primary Geographic Focus Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 3: Closed-End Distressed Private Real Estate Fundraising Fig. 4: Closed-End Distressed Private Real Estate Fundraising by Primary Property Focus, 2013 - 2015 YTD (As at 19 August by Proportion of Target Size Achieved, 2013 - 2015 YTD (As at 2015) 19 August 2015)

20 100% 0% 18 15% 18 90% 20% 25% 16 80% 15% 125% or More 14 13 13.1 70% No. of Funds 25% 12 60% 15% 40% 101-124%

10 Aggregate 50% 8.5 100% Capital 8 40% 0% Raised ($bn) 25% 38% 50-99% 6 30% 20% Less than 50%

4 Proportion of Funds Closed 20% 25% 2 10% 20% 1 0.8 15% 0 0% Diversified Residential Niche 2013 2014 2015 YTD Primary Property Focus Year of Final Close Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 5: Five Largest Closed-End Distressed Private Real Estate Funds Closed, 2013 - 2015 YTD (As at 19 August 2015)

Primary Property Final Close Final Close Fund Firm Geographic Focus Focus Date Size ($mn) Lone Star Fund IX Lone Star Funds Europe, US Residential Jul-14 7,200 Lone Star Fund VIII Lone Star Funds Europe, Japan, US Residential May-13 5,000 Oaktree Real Estate Opportunities Oaktree Capital Management Global Diversifi ed Dec-13 2,700 Fund VI Cerberus Institutional Real Estate Cerberus Real Estate Capital Europe, US Diversifi ed Oct-13 1,426 Partners III Management Rialto Real Estate Fund II Rialto Capital Management US Diversifi ed Dec-13 1,305 Source: Preqin Real Estate Online

• Conduct market research and track industry trends

• Benchmark fund performance

• Access slide decks from Preqin presentations at conferences

Gaining access to Preqin’s Research Center Premium is easy – to register for free, please visit:

www.preqin.com/RCP alternative assets. intelligent data. The Facts UK-Based Real Estate Investors Download Data

UK-Based Real Estate Investors

Lauren Mason examines the allocations, investment preferences and future plans of UK-based private real estate investors.

Fig. 2: UK-Based Investors’ Current and Target Allocations to Fig. 1: Breakdown of UK-Based Real Estate Investors by Type Real Estate (As a Proportion of Total Assets)

50% Private Sector Pension 45% 45% Fund 4% 40% 4% Public Pension Fund 40% 5% 36% 35% Current 6% Wealth Manager 34% 30% Allocation Foundation 25% 22% 7% Target 20% 18% Endowment Plan Allocation 15% 11% 9% 9% Family Offices Proportion of Investors 10% 8% 5% 5% 3% Asset Manager 1% 0% 0% 12% Insurance Company 20% 15% Less 1-2.4% 5-9.9% or More than 1% 2.5-4.9%

Other 10-14.9% Allocation to Real Estate (As a % of AUM) Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 3: Strategy Preferences of UK-Based Private Real Estate Fig. 4: Geographic Preferences of UK-Based Private Real Investors vs. All Other Investors Estate Investors

100% 80% 90% 70% 90% 70% 80% 70% 60% UK-Based 60% Investors 50% 50% 46% 46% 36% 40% 40% 36% 37% 35% All Other Investors 30% 30% 21% 23% 20% 18% Proportion of Investors 12% 10% 20% 16% 10% Proportion of Investors 13% 12% 10% 0% 10% 3% 0% Debt Core Core-Plus Distressed Asia- World Rest of Pacific Global North Europe America Markets Opportunistic Value Added Emerging Strategy Preference Geographic Preference Source: Preqin Real Estate Online Source: Preqin Real Estate Online

Fig. 5: Sample of UK-Based Investors Planning New Investments

Assets under Investor Type Investment Plans for the Next 12 Months Management (£bn) Greater Manchester Pension Will invest in approximately three new global-focused private real Public Pension Fund 17.5 Fund (GMPF) estate funds in the next 12 months on an opportunistic basis. Anticipates making up to 12 new value added and opportunistic CDC Group Government Agency 3.4 private real estate fund commitments over the coming year, solely targeting opportunities in emerging markets. Planning to invest £5-25mn in UK-focused opportunistic private Imperial College Endowment Endowment Plan 0.5 real estate funds in the next 12 months, targeting development projects in West London with Crossrail adjacency. Source: Preqin Real Estate Online

Source new investors for fundsalternative assets. intelligent data.

Identify new investment opportunities

Conduct competitor and market analysis

Compare fund performance against industry benchmarks

Develop new business

alternative assets. intelligent data. Conferences Conferences Spotlight Download Data

Conferences Spotlight

Conference Dates Location Organizer Preqin Speaker Discount Code

GRI Europe Summit 2015 10 - 11 September 2015 Paris GRI - -

BVCA Real Estate Forum 15 September 2015 London BVCA Andrew Moylan -

10% Discount - Global REITs Summit 1 October 2015 New York iGlobal Forum - PREQIN The Real Estate and Infrastructure 5 - 6 October 2015 India APREA - - Investors' Summit NAIC’s 45th Annual Meeting & 5 - 6 October 2015 New York NAIC - - Convention Tech Reboot 3.0: Transforming 10% Discount - 13 October 2015 New York iGlobal Forum - Commercial Real Estate PREQIN Real Estate Crowdfunding Summit 10% Discount - 14 October 2015 New York iGlobal Forum - - East PREQIN 13th Real Estate Private Equity 10% Discount - 20 - 21 October 2015 New York iGlobal Forum - Summit PREQIN

MIPIM UK 21 - 23 October 2015 London Reed Midem - -

ASK2015 Global Real Estate 22 October 2015 Seoul IK Summit Andrew Moylan -

The 4th Asia Paciﬁ c Real Estate 22 October 2015 Philippines APREA - - Investment Summit Philippines Family Ofﬁ ce & Private Wealth 28 - 30 October 2015 Napa, CA Opal Finance Group - - Management Forum – West

Real Estate Game Change 2015 3 November 2015 Chicago Privcap - -

The 7th Annual Women's Alternative Investment Summit 5 November 2015 New York Falk Marques Group - - (WAIS) Borrower Investor Real Estate 10% Discount - Mezzanine Financing Subordi- 10 November 2015 New York IMN - PQ10 nated Debt 2015 Middle Eastern Family Ofﬁ ce 11 - 12 November 2015 Dubai Opal Finance Group - - Symposium The 2nd Real Estate Family Ofﬁ ce 10% Discount - and Private Wealth Management 12 - 13 November 2015 Miami, FL IMN - PQ10 Forum

Endowment & Foundations Forum 16 - 18 November 2015 Boston, MA Opal Finance Group - -

America’s Family Ofﬁ ce Forum 18 - 19 November 2015 Miami, FL Terrapinn - -

India GRI 2015 18 - 19 November 2015 Mumbai GRI - -

Wealth Management Americas 18 - 19 November 2015 Miami, FL Terrapinn - -

AsiaPac Property Leaders Summit 24 – 26 November 2015 Singapore APREA - -

Alternative Investing Summit 9 - 11 December 2015 Dana Point, CA Opal Finance Group - -

13th Annual Winter Forum on Real 10% Discount - Estate Opportunity & Private Fund 20 - 22 January 2016 Laguna Beach, CA IMN - PQ10 Investing Held The 9th Annual Women's Private 9 - 11 March 2016 California Falk Marques Group - - Equity Summit

Alternative Funds Strategies - Real Estate Forum

Date: 15 September 2015 Location: Royal Society of Arts, the Strand, London Organizer: British Venture Capital Association

The British Venture Capital Association Alternative Fund Strategies Forum on Real Estate will explore the growing market of real estate funds. The half day forum will bring together LPs, fund managers and advisers to assess the opportunities and challenges and harness the knowledge of our sponsors and members to respond to a thought-leading agenda.

4th Global REITs Summit

Date: 1 October 2015 Information: http://www.iglobalforum.com/reit4 Location: New York, NY Organizer: iGlobal Forum

iGlobal Forum is pleased to announce the upcoming 4th Global REITs Summit taking place in New York on Thursday, October 1st! Valued at over a trillion dollars, REITs are growing at a never-before-seen rate as more and more investors enter the space.

The Real Estate and Infrastructure Investors Summit 2015

Date: 5 - 6 October 2015 Information: [email protected] Location: Trident Nariman Point, Mumbai, India Organizer: Asia Pacific Real Estate Association (APREA) and National Real Estate Development Council (NAREDCO)

APREA is co-hosting the Summit with the National Real Estate Development Council (NAREDCO), a joint government-industry body. This high-powered event will feature India’s leading politicians, investors, developers and regulators, it offers excellent opportunities to explore India’s real estate and infrastructure markets and connect with thought-leaders and business partners.

13th Real Estate Private Equity Summit

Date: 20 - 21 October 2015 Information: http://www.iglobalforum.com/repe13 Location: New York, NY Discount Code: PREQIN Organizer: iGlobal Forum

iGlobal Forum is pleased to announce our 13th Real Estate Private Equity Summit - the leading deal-sourcing event for investors and dealmakers operating in the real estate space. For those who invest in U.S. real estate now, there is still ample opportunity for return; but the inflow of overseas capital and shortage of inventory mean that buyers need to creatively source opportunities in new markets and asset classes.

ASK2015 Global Real Estate Summit

Date: 22 October 2015 Information: www.asksummit.co.kr Location: Four Seasons Seoul Hotel, South Korea Organizer: The Korea Economic Daily

Korean institutions are growing from $2tn to 5tn over the next 30 years and looking for substitute for fixed income in fields of infrastructure and real estate. Summits provides best access to investors by inviting top 15 investors as speakers, top 20 CIOs at VIP dinner, and around 250 investors at floor.

The 7th Annual Women’s Alternative Investment Summit (WAIS)

Date: 5 - 6 November 2015 Information: www.womensalternativesummit.com Location: The Pierre New York, NY Organizer: Falk Marques Group

The 7th annual Women’s Alternative Investment Summit will bring together an influential group of more than 400 senior-level women — fund managers, institutional investors, and advisors to the industry — across the spectrum of alternatives to build trusted networks and engage in candid discussions about alternative investments in an emerging new world.

IMN’s RE Family Office and Private Wealth Management Forum

Date: 12 -13 November 2015 Information: http://www.imn.org/refamilyoffice15 Location: Miami, FL Discount Code: PQ10 Organizer: Information Management Network

IMN invites you to attend our Real Estate Family Office and Private Wealth Management Forum. The real estate investment climate has improved and family offices and private wealth managers are increasing their allocation in real estate investment. There is a plethora of investment options which IMN’s conference will cover.

India GRI 2015

Date: 18 -19 November 2015 Information: www.globalrealestate.org/india2015 Location: Mumbai, India Organizer: Global Real Estate Institute

This November, the drivers of Indian real estate will gather for the 10th anniversary of India GRI, an exclusively senior meeting. International and local Heads of Real Estate from leading institutional investment firms will connect with developers, property companies and financiers over closed-door discussions, to build partnerships and tackle the challenges facing the industry today.