TIAA-CREF and BlackRock are the latest investment management houses to merge their real estate and infrastructure activities into a single real assets division. As alluded to on the cover of this issue of IPE Real Estate, both investors and managers are looking to create real assets umbrellas.

TIAA Global Real Assets will be led by Jose Minaya, formerly head of private markets. BlackRock’s new entity will be headed by global head of infrastructure Jim Barry, who said investors were increasingly approaching real assets “as a distinct and more integrated asset class”.

Early in 2015, Legal & General did something similar, discontinuing its Legal & General Property brand and creating LGIM Real Assets. Later that year, AXA Investment Managers launched AXA IM – Real Assets.

LGIM Real Assets is led by Bill Hughes, formerly head of Legal & General Property, while AXA IM – Real Assets is headed by Pierre Vaquier, previously CEO of AXA Real Estate.

Both are interviewed in our latest Investor Forum and both point to investor perceptions. “In the eyes of investors, they [real estate and infrastructure] are similar – long-term, illiquid, with income that is inflation-linked and based on tangible assets,” says Hughes.

“It is a way for us to deleverage those common characteristics,” Scemama says, “by having a global platform and a similar approach.”

Reorganisations are also taking place at institutional investors. Chris West of the Church Commisioners for England also features in the Investor Forum. West is head of property funds, timberland and infrastructure, a title that denotes a similarly joined-up approach. “A diversified real assets strategy across many asset classes should provide protection against potential overpricing,” he says.

The London Pensions Fund Authority (LPFA) is also investing in real assets, as head of private markets Jonathan Ord confirms in the Investor Forum. The LPFA has established a £500m infrastructure fund with the Greater Manchester Pension Fund.

There will be more collaboration among the UK’s local government pension schemes (LGPS), as government reforms force them to pool assets and investment strategies. The local authority pension funds are expected to form up to six pools of £25bn or more.

A response to a government consultation from several LGPS schemes has argued in favour of creating a single infrastructure asset pool, enabling better access to the asset class. LGPS exposure to infrastructure is growing, albeit from a low base, so a pooling of resources and capital would help funds move into the asset class.

The various property portfolios held by LGPS schemes, meanwhile, are much more established and vary from fund to fund. What eventually happens to these holdings will have major implications for the schemes – and the real estate fund management industry currently managing them.