Summary and implications
This week we hosted a seminar launching the results of our real estate fund trends survey 2011/12.
Through our survey we aim to inform you of the latest trends, keep you in touch with industry thinking of both fund managers and investors and ensure you are fully informed of market expectations. We hope our survey will help inform and validate your investment decisions.
Our survey launch focussed on three themes: market trends in the real estate funds sector, factors behind successful fund launches and trends in investment terms. This briefing sets out the key messages.
To read the full survey report, click here
- Market trends
The three main trends identified in our survey were as follows:
- Joint ventures and clubs are favoured over funds. Those who can, and have the skill and expertise, have been moving away from passive fund investment.
- There is increased investment in core funds as an investment style, over value added or opportunistic models.
- There is more merger activity within the fund management sector. The need for scale and efficiency is one of the largest drivers for consolidation in the market.
- Factors behind successful fund launches
Those fund managers who embrace investor requirements of pipeline, transparency and a demonstrable track record can achieve traction in their capital raisings. Our survey highlighted three key factors that facilitate a successful fund launch:
- Identifying seed assets. A lack of suitable stock has been a problem area for the last year or so, so where a fund manager has a transaction pipeline or has identified seed assets, this will help a fund to launch.
- Follow-on funds are more likely to succeed.
- A core investment style with no or low gearing (which reflects the current more cautious investment approach).
- Key investment terms
Areas of particular interest on investment terms coming out of our survey were alignment of interests, good corporate governance and fee transparency. Fund managers need to show best practice in these areas when launching a fund.
REITS changes released
On 6 December HMRC finally released the detailed draft changes to the REIT regime promised in late summer. Whilst there were a few disappointments for some, there were no major surprises. Click here for our full briefing.
AIFMD- ESMA’s final advice
The European Securities and Markets Authority (ESMA) has issued its final Level 2 advice on the detailed rules required to underpin AIFMD. Click here for some key headline points for the real estate funds sector.
Leaked EU privacy rules demand stringent compliance and substantial penalties
The draft new legislation on EU data protection (which was recently leaked) heralds a step change in the approach to privacy and data protection in EU member states, with much stronger protection of data subjects’ rights and a stronger focus on enforcement. Click here for a full briefing, in particular its impact on fund managers.