Top 10 managers account for more than one third of total AUM, and European strategies leapfrog North American in 2020
19 May 2021, Amsterdam – Total global real estate assets under management (AUM) hit €3.3 trillion in 2020, despite the challenges of the global pandemic.
The Fund Manager Survey 2021 published today by ANREV, INREV and NCREIF, highlights the strength of real estate as an institutional asset class. The latest results build further on the massive gains of the past decade with total AUM more than tripling from €0.9 trillion in 2009 to €3.3 trillion at the end of 2020.
A significant proportion of total AUM (37%) is attributed to the top 10 global managers, while the largest 39 managers in the upper quartile of respondents by number account for 78% of the total. Interestingly, despite the greatest concentration of global AUM in larger fund managers, the growth in 2020 came from the lower quartiles, albeit the overall impact is very marginal.
This year’s survey saw a rise in the number of participants to 154 – up from 140 the previous year.
Global top 10
The top two slots are unchanged from last year with the Blackstone Group leading the pack of managers with AUM of €260.5 billion, followed by Brookfield Asset Management on €172.4 billion. Prologis is at number three with AUM of €121.0 billion, moving up from 6th place in 2019 – the result of strong value growth in the logistics / industrial sector. PGIM Real Estate are fourth with €118.8 billion, and Nuveen retains its fifth-place ranking with an AUM of €108.4 billion.
The remainder of the global top 10 is made up of: AXA IM Alts (6th – €96.0 billion), CBRE Global Investors (7th – €92.3 billion), UBS Asset management (8th – €88.7 billion), MetLife Investment Management (9th – €82.9 billion) and Capitaland (10th – €81.7 billion). Each of the top 10 fund managers posted an AUM of at least €80 billion in 2020.
Hines, which was fifth on the list last year, has dropped to 14th in the current survey and Swiss Life dropped from 9th to 11th over the same period. These falls were due in large part to the introduction of a new, streamlined definition of AUM (see ‘Notes to Editors’).*
Around the regions
With 39.1% of total global AUM, European strategies account for the lion’s share, overtaking those in North America (32.2%) in 2020. Asia Pacific strategies contribute 17.9% to the total, while global strategies are at 10.5%.
At an individual manager level, AXA IM Alts tops the European strategies list with AUM of €76.1 billion, followed by Swiss Life Asset Management in second place (€73.7 billion) and The Blackstone Group (€65.9 billion) in third. All of the managers included in the European strategies’ top ten list posted AUM of more than €39 billion.
With an AUM of €102.4 billion, Brookfield Asset Management tops the list of managers in North America, where PGIM Real Estate is second with € 98.2 billion AUM. The third largest North American manager is Prologis on €83.0 billion.
The three largest managers with Asia Pacific strategies are ARA Asset Management (€54.5 billion), Capitaland (€ 51.3 billion) and GLP (€34.5 billion). Interestingly, the two largest are way ahead of the rest, each with total real estate AUM of over €50 billion. Only the top three in this region have an AUM of more than €30 billion each.
The largest manager following a global strategy is The Blackstone Group which reported more than US$114 billion; nearly double the AUM of the second largest, Brookfield Asset Management. The Blackstone Group is the only fund manager to feature in the top 10 rankings in all three main regions, as well as for global strategies.
Vehicles, dry powder and M&A activity
Non-listed real estate vehicles account for a substantial 83.1% of the total global AUM. Looking closer at the non-listed real estate vehicles only, non-listed real estate funds continue to dominate globally, with a 56% share. Next are separate accounts investing directly, followed by JVs and clubs.
The proportion of total global AUM attributed to non-listed real estate debt products rose from 7.6% in 2019 to 9.4% in 2020. In Europe, the uptick was even more marked – climbing to 8.1% from 3.6% the year before. These shifts offer further evidence of the growing importance of debt products to investors.
For the first time, the Fund Manager Survey captures data related to dry powder held by managers to assess the state of the industry in terms of total contractually committed capital from investors, which is available and ready for deployment but is not yet invested. It reveals a total of €195 billion of dry powder or 9.3% of total global AUM based on the 64% sample of respondents to this question. This is a healthy result and confirms the strength of interest and investor demand for global real estate. Both the upper and third quartiles of respondents each carry a consistent 8-9% of dry powder.
Around 20% of respondents globally were involved in merger activity in both 2019 and 2020, while the equivalent results for acquisitions were a little lower at 16% and 14% respectively. Managers in the Asia Pacific region accounted for the largest share of mergers in 2020 at 25%, versus 18% for their counterparts in Europe and 17% in North America, reflecting the different stages of evolution in each of the regional markets. But across all regions, a third of managers (33%) referenced ‘multi-rationale’ as the main driver for M&A activity, suggesting several motivations the most likely of which are the different aspects of diversification.
On a projected basis for activity in 2021, this figure increases to 36%. Looking ahead, 7-8% of all respondents globally are planning M&A activity in 2021.
Lonneke Löwik, INREV CEO, said: ‘The evolution of the global growth in fund managers’ AUM speaks to a continuing robust appetite for the asset class. This is particularly encouraging given the challenges of 2020 in light of the global health pandemic. The details also reveal some interesting signposts for the future, healthy levels of dry powder that indicate the capacity to execute deals, as well as strong demand for non-listed real estate funds and considerable emphasis on the European debt products. All of the above provide a broad level of comfort for the year ahead, and especially as many global economies are also starting to recover.’
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Notes to Editors
About the Fund Manager Survey 2021
The ANREV / INREV / NCREIF Fund Manager Survey explores real estate assets under management, providing insights into regional compositions and vehicle types.
This year’s survey includes 154 managers and represents total real estate assets under management of €3.3 trillion as at end 2020.
The survey was launched in 2011 and was expanded to include global coverage in 2015. Results are based on data provided directly to ANREV, INREV and NCREIF by managers.
*Definition of AUM
Over the past year, ANREV, INREV, NCREIF and PREA Reporting standards together with the Global Standards Steering Committee (SSC) have conducted an in-depth consultation to assess and bring greater consistency to the definition of AUM, including calculation methodologies. This exercise has resulted in a creation of research definition of AUM which has been applied by all participants in this year’s Fund Manager Survey to their data submissions.
This explains why some of the results from the current survey may seem substantially different from those in previous years.
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 €3.3 trillion and INREV members deliver €385 billion of stimulus to the real economy of Europe.
INREV has 453 members which include 91 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.
Based in Chicago, the National Council of Real Estate Investment Fiduciaries (NCREIF) is the American association of institutional real estate professionals who share a common interest in their industry. This includes investment managers, plan sponsors, academicians, consultants, appraisers, CPA's and other service providers who have a significant involvement in institutional real estate investments. They come together to address vital industry issues and to promote research. NCREIF acts as a non-partisan collector, processor, validator and disseminator of real estate performance information, including several quarterly indices. https://www.ncreif.org
ANREV is the Asian Association for Investors in Non-Listed Real Estate Vehicles, a not-for-profit organisation based in Hong Kong. ANREV's agenda is driven by the members, in particular the investors, and is focused on improving transparency and accessibility of market information, promoting professionalism and best practices, sharing, and spreading knowledge. Fund managers, investment banks, lawyers and other advisors provide support in addressing key issues facing the Asian non-listed private equity real estate fund markets.
ANREV is part of a global alliance together with the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and the National Council of Real Estate Investment Fiduciaries (NCREIF), which works with the other regional associations to advance the global agenda of transparency, accessibility and professionalism and increased harmonisation across the non-listed real estate industry. http://www.anrev.org