GLOBAL - Almost a third of real estate investors have opted for joint ventures over pooled funds as they seek lower fees, direct control and better market opportunities, according to Preqin.

Data from the research company also shows an increase in the appetite for co-investment (from 24% last year to 27%) and separate accounts (from 21% to 23%).

Analyst Carla Henry attributed the increase to institutional growth, with - typically - large investors looking to increase their exposure via non-fund investment structures.

Among investors with at least $10bn (€7.78bn) in assets under management, 71% invested in joint ventures and 68% in separate accounts. In contrast, among institutions with less than $1bn, 20% invested via joint ventures and 16% in separate accounts.

Among those planning to invest in funds, there has been a significant increase in appetite for debt and distress, with 23% planning to invest in debt funds within the next 12 months (up from 8% last year), and 19% targeting distressed funds (up from 5%).

On investment style, 53% said they would commit capital to core vehicles over the next 12 months, compared with 44% planning to invest in value-added funds (down 3% from 2011) and the same percentage in opportunistic funds (up 2%).

In the meantime, specialists may have more chance of attracting capital than established managers, even if they have not previously managed a fund - although 20% of investors said they would commit capital to first-time funds, and only 23 such funds reached a final close 2012, compared with 53 in 2011.

"Many of the managers that have been fundraising successfully in recent months are managing funds [that] are focused narrowly on a particular sector or location where the team is able demonstrate expertise," said Henry in a note.

"First-time managers may become more attractive to investors if they can demonstrate that they offer a unique opportunity, even if they have not previously managed a fund."

Despite investors' preference for specialists, Andrew Moylan, senior research analyst at Preqin, suggested that investors would continue to single out managers who had performed well during the crisis.

"Past performance is no guarantee of future success, but it can be an indicator of the skill of the investment team," he said.