Real Estate Secondaries Alternative Assets

Real Estate Secondaries Alternative Assets

The Facts Real Estate Secondaries alternative assets. intelligent data. Real Estate Secondaries Although no real estate secondaries funds have held a fi nal Fig. 1: Annual Real Estate Secondaries Fundraising, close so far in 2016, a glut of capital was raised in 2014 and 2003 - 2016 YTD (As at 17 May 2016) 2015 – a combined $4.4bn – which is being invested in the market (Fig. 1). Secondary fund of funds manager Strategic 4.5 4 Partners Fund Solutions is also currently raising capital for its 4.0 sixth dedicated real estate secondaries vehicle, which will add 3.5 to the amount of capital available. 3 3 3.0 No. of Funds Closed 2.5 2.3 Capital from real estate secondaries funds is not the only source 2.2 2 2 2 2 2.1 of secondary real estate transactions. Preqin’s Secondary 2.0 Aggregate 1.4 Capital Market Monitor tracks a total of 181 investors interested in 1.5 Raised ($bn) buying real estate fund interests on the secondary market. As 1 1 1 1 1.0 0.7 shown in Fig. 4, 40% of these are public and private pension 0.5 0.5 0.3 0.3 0.3 0.2 funds, which typically adopt an opportunistic approach to 0.1 00.0 buying real estate fund stakes on the secondary market. 0.0 2003 2004 2005 2007 2009 2010 2011 2012 2013 2014 2015 In terms of the supply of opportunities, Preqin’s Secondary Market Monitor tracks 130 investors that are open to selling 2016 YTD Year of Final Close real estate fund interests on the secondary market, the Source: Preqin Secondary Market Monitor majority (54%) of which are based in Europe (Fig. 6). Fig. 2: Five Largest Real Estate Secondaries Funds Raised, All Time (As at 17 May 2016) Primary Fund Size Year of Final Fund Firm Headquarters Vintage Geographic ($mn) Close Focus Partners Group Real Estate Partners Group Switzerland 2013 1,950 2014 Europe Secondary 2013 Landmark Real Estate Fund Landmark Partners US 2014 1,600 2015 US VII Partners Group Real Estate Partners Group Switzerland 2010 1,500 2010 Europe Secondary 2009 Liquid Realty III Liquid Realty Partners US 2006 772 2005 Europe Landmark Real Estate Fund Landmark Partners US 2010 718 2011 US VI Source: Preqin Secondary Market Monitor Fig. 3: Five Largest Real Estate Secondaries Fund Managers by Aggregate Capital Raised for Secondary Real Estate since 2003 No. of Real Estate Secondaries Aggregate Value of Real Estate Firm Headquarters Funds Raised Secondaries Funds Raised ($mn) Partners Group UK 2 3,450 Landmark Partners US 6 3,350 Liquid Realty Partners US 4 1,354 Strategic Partners Fund Solutions US 5 1,200 Morgan Stanley Alternative US 2 870 Investment Partners Source: Preqin Secondary Market Monitor Page 1 of 2 © 2016 Preqin Ltd. / www.preqin.com The Facts Real Estate Secondaries alternative assets. intelligent data. Fig. 4: Investors Interested in Buying Real Estate Funds on Fig. 5: Investors Interested in Selling Real Estate Funds on the Secondary Market by Type the Secondary Market by Type Public Pension Fund Public Pension Fund 13% Private Sector Pension 15% Fund 20% Private Sector 24% Pension Fund 3% Real Estate Fund of 4% Funds Manager 8% Endowment Plan Endowment Plan Insurance 6% Company Insurance Company 8% 17% Asset Manager 7% Foundation 16% Asset Manager Real Estate Fund of Funds Manager 8% Private Equity Fund of 8% Funds Manager Foundation 9% 10% 12% Bank 12% Other Other Source: Preqin Secondary Market Monitor Source: Preqin Secondary Market Monitor Fig. 6: Investors Interested in Selling Real Estate Funds on Fig. 7: Historic Real Estate Secondaries Pricing (% of NAV), the Secondary Market by Location 2010 - 2015 100% 90% 90% 90% 1% 5% 83% 80% 74% North America 70% 71% 70% 40% Europe 60% 50% Asia (% of NAV) 40% Rest of World 54% 30% 20% Historic Real Estate Secondaries Pricing 10% 0% 2010 2011 2012 2013 2014 2015 Source: Preqin Secondary Market Monitor Source: Preqin Secondary Market Monitor Fig. 8: Sample Real Estate Secondary Transactions in the Last 12 Months Fund Seller Buyer(s) Date Red Fort India Real Estate Fund II; Gateway New Zealand Superannuation Partners Group May-16 Capital Real Estate Fund III Fund Leicestershire County Council Standard Life Investments European Property Stichting Pensioenfonds APF Pension Fund, Lloyd’s Mar-16 Growth Fund Superannuation Fund Rockspring Portuguese Property Partnership; Rockspring German Retail Box Fund; Aviva BNP Paribas Investment Partners Partners Group Q4 2015 Investors Property Investment Fund; Rockspring PanEuropean Property Rockspring German Retail Box Fund; Colyzeo II Wellcome Trust Partners Group Q4 2015 Brockton Capital II ImmoFinRe Group Partners Group Q4 2015 EirGrid Pension Fund, Lloyd’s Standard Life Investments European Property Akzo Nobel Pension Superannuation Fund, Royal Bank of Q4 2015 Growth Fund Scotland Group Pension Fund California State Teachers' Waterton Residential Property Fund IX Oregon State Treasury Nov-15 Retirement System (CalSTRS) CB Richard Ellis Strategic Partners III; Harbert European Real Estate Fund II; LaSalle Asia California Public Employees' Strategic Partners Fund Solutions Nov-15 Opportunity Fund III; European Property Retirement System (CalPERS) Investors; Niam Fund IV Source: Preqin Secondary Market Monitor Page 2 of 2 © 2016 Preqin Ltd. / www.preqin.com.

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