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Non-listed funds expense ratios highlight industry transparency

20 September 2018, Amsterdam – The 2018 INREV Management Fees & Terms Study highlights the non-listed real estate industry’s dramatic leap in transparency, achieving a record response rate from INREV members.

A total of 418 vehicles provided data to the study – marking a ten-year high. Of this number, 155 funds delivered data on their total expense ratio (TER), compared with 42 in the previous study, and 111 vehicles provided details of their real estate expense ratios (REER). 

The study revealed that the European non-listed real estate all vehicles average TER was 0.86% of gross asset value on an equally weighted basis and before performance fees. 

Funds in the residential sector displayed the lowest TERs of all vehicle types at 0.54%, outstripping other key sectors, such as office at 1.02%, and retail at 0.95%.
In terms of vehicle styles, core funds recorded a lower than average TER of 0.79%, demonstrably different from the higher than average 1.19% TER of value added funds.  

These relative spreads were mirrored in terms of vehicle structures, with the average TER for open end funds (the majority of which are core) at 0.66%; while closed end funds (which adopt a mix of core, value added and opportunity strategies) hit a TER of 1.18%.

Economy of scale seems to have an impact as the study identified size as an important determining factor for total expense ratios.  Larger vehicles (over €1 billion in value) achieved a lower average TER of 0.58%; medium sized funds (€500 million to €1 billion) reached 0.71%; and small funds (less than €500 million) had the highest average TER by comparison, at 1.07%.

There was a significant difference in the expense ratios of funds with different vintages. Those completing a first close from 2008 onwards – just after the great financial crisis – had an average TER of 0.96%, compared with the considerably lower 0.49% recorded by older funds launched before 2001.  
Funds with ambitions to maintain gearing levels below 40% demonstrated an average TER of 0.66%, significantly lower than the 1.04% recorded by their counterparts with gearing levels above 40%.

INREV’s Director of Research and Market Information, Henri Vuong commented: ‘Given the increasing need for clarity on fees and costs, this edition of the study is particularly pertinent. Thanks to the record number of participants this year, we’ve been able to provide a uniquely comprehensive picture of the current situation. The study is further evidence of how the non-listed real estate industry is delivering against the transparency agenda.’

– Ends –    

For further information, please contact: 

Johlyn da Prato, johlyn.daprato@inrev.org, +31(0)621397456
Lauren Hewitt, inrevteam@firstlightpr.com | +44 (0) 7776 146 434
Jack Rodgers, inrevteam@firstlightpr.com | +44 (0) 7580 427 746

Notes to Editors

About the INREV Management Fees & Terms Study

The INREV Management Fees & Terms Study explores the fee and costs structures of European non-listed real estate funds, with a focus on total expense ratios (TERs) and real estate expense ratios (REERs).

This year’s study includes 418 vehicles (191 open end and 227 closed end), managed by 94 managers with a combined gross asset value of €155.7 billion as at end 2017. 

The study was launched in 2007 and is published every two years in September. 


INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, was launched in May 2003 as a forum for investors and other participants in the growing non-listed real estate vehicles sector. The association represents and reflects an industry with a total value of €2.7 trillion and INREV members deliver €300 billion of stimulus to the real economy of Europe.

INREV has 432 members which include 75 of the largest institutional investors as well as 40 of the 50 largest real estate fund managers, plus banks and advisors across Europe and elsewhere.

The non-profit association is focused on increasing the transparency and accessibility of non-listed vehicles, promoting professionalism and best practice, and sharing knowledge. It is based in Amsterdam, the Netherlands.