EUROPE - European pension funds have lent their weight to a campaign organised by the European Association for Investors in Non-listed Real Estate Vehicles (INREV), aimed at increasing transparency among unlisted property funds.

Patrick Kanters, property manager at APG - the body responsible for managing and administering the €217bn ABP pension fund - and Michael Nielsen, managing director of €65bn Danish pension fund ATP, have called on fund managers to deliver performance data to INREV Index scheduled for publication next month.

APG invests around 45% of its €20bn real estate portfolio in unlisted property while ATP's allocation is €1.53bn.

Kanters said in a statement strong market performance and yield compression in recent years had made the value provided by fund managers unclear. His comments follow those of Eugene Rebers, senior counsel at civil service pension fund ABP, as he told IPE Real Estate last autumn some fund managers were hiding behind complex systems.

At the same time, Nielsen has contrasted property unfavourably with equities and bonds, both of which are benchmarked according to long-term indices, as he said the lack of an index made unlisted property allocations less likely because of a lack of the long-term performance data demanded by asset liability management (ALM) models.

The drive to benchmark data on unlisted vehicles has, unsurprisingly, gained broad approval from pension schemes. Yet the degree of activism on the issue has often depended on the size of the fund, with some - such as PGGM - urging smaller schemes to pool their clout. 

"Size isn't important in itself, but it made sense to start with the largest pension funds," said INREV research director Andrea Carpenter. "They can get the message out to smaller funds."

She added: "There is a difference in the amount of influence exercised by large and small funds, and larger funds are using that influence to get pension funds to have those conversations with fund managers."

The index will this year include sub-indices of performance based on funds' investment styles.

"The index isn't frozen but we're moving towards freezing it so we need to grow it," said Carpenter. "The more data we have, the better the sample. It's an ongoing process. It's about growing the sample."

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