Record ‘dry powder’ for PERE investment will lower performance

Private equity real estateTwo-thirds of private equity-real estate (PERE) firms intend to deploy more capital this year, a survey has indicated. Preqin, a private equity researcher, found almost half of 180 PERE fund managers planned to invest significantly more money in 2017. But valuations were a key concern for fund managers and many have reduced their performance objectives as a result. This is because the industry has a record $250 billion (€237 billion) of “dry powder” (unused capital), which has increased competition for assets and put extra pressure on asset pricing. Just over half of managers surveyed said competition for lower risk assets had increased and 41% ranked opportunistic assets as the most fiercely sought after type of investment. Just under half of the managers with a fund in the market had lowered their performance expectations, Preqin found. Over the last two years, PERE investment activity – which combines debt and equity investments in property – has increased notably, with the aggregate value of deals reaching $242 billion in 2015, and $220 billion last year. ©2017 funds europe

Executive Interviews

CEO INTERVIEW: Munro gains three-year track record

Mar 16, 2017

Aviva Investors’ annual results this month were the third set since Euan Munro took over as CEO. Nick Fitzpatrick speaks to him about the ‘Aims’ fund at the heart of the firm’s outcome strategy.

DISTRIBUTION INTERVIEW: Tales of the unexpected

Mar 16, 2017

Laurence Terryn, a fund selector at Candriam, tells David Stevenson how the twists and turns of the past year’s macro environment flavoured her approach to fund selection.

Roundtables

ASSET SERVICING ROUNDTABLE: Under pressure

Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.

SEC LENDING ROUNDTABLE: Both a borrower and a lender be

Jan 11, 2017

Industry heavyweights, including agent lenders, discuss issues affecting the securities lending sector such as regulation and the types of collateral being used.