GLOBAL - As many as 50% of fund managers will go out of business in an industry shakeout that still has far to go, according to Claude Angéloz of the Swiss-based Partners Group.

Angéloz, co-head of private real estate at the consultancy, told IPE Real Estate that the collapse of failed funds to date marked only the beginning of an attrition trend that will see another tranche of funds disintegrate or merge. 

"People who blew up their funds are out of business," he said. "But some have funds that are still alive but which will slowly bleed to death because they will no longer be able to raise capital. 

"It won't be spectacular - in most cases it won't be on the front page of the Wall Street Journal - but we estimate that as many as 25-50% of managers will disappear one way or another."

Despite evidence of a paring down of the industry, Angéloz said he had no reason to believe the attrition trend had peaked. "The clean-up process is in full swing. We're far from seeing the end of it," he said. 

Although the consolidation trend could last longer than some had expected, he said attrition represented an opportunity for performing fund managers to emerge. "When large trees fall, there are opportunities for new trees to grow," he said.

"After the crisis we expect the industry to have more property specialists to chose from. I hope the investment community has learned the lessons from the crisis, but I can't predict what they will do in future."

Partner Group's fund manager database currently includes 1,000 property specialist firms and teams, with manager performance graded ‘good' or ‘average' for each market and segment.

"When you've been in this industry for 20 years, it often boils down to individuals," said Angéloz. "When you see someone who underperformed before and they show up in another organisation, you can draw your own conclusions - but also vice versa."