INREV has overhauled its industry guidelines for European non-listed real estate funds as it pushes for the creation of a global reporting standard.
The European Association for Investors in Non-listed Real Estate Vehicles launched the new guidelines at its annual conference in Berlin, changing key items that were created before the global financial crisis.
The revised guidelines take into account regulatory changes, cover liquidity issues for the first time and cater for different vehicles such as joint ventures and club deals.
Approximately 300 organisations in Europe, the Americas and Asia were consulted during an 18-month review of the original guidelines, which were developed in 2005 and formally integrated in 2008.
INREV said the move would “boost transparency and performance analysis”, and “promote greater investor choice”.
Speaking in Berlin, Matthias Thomas, INREV chief executive, said the guidelines were intended to improve reporting across all three continents.
He said: “Geographically, we are aiming for other regions than Europe. At the moment, it’s going to be a nightmare if you try to compare [different] NAVs, for example. The foundation of a global standard would help compare on a like-for-like basis.”
Lonneke Löwik, who is stepping down as director of professional standards at the end of the month, said the industry had “now been through a full financial cycle since the guidelines were first formalised”, and “it was clear to us that there was not only a need to update the INREV guidelines but to ensure that they could respond to market changes.”
Singapore’s sovereign wealth fund Government Investment Corporation (GIC) welcomed the new guidelines. Neil Harris, head of asset management for real estate in Europe at GIC, described them as a “significant step forward” for the real estate funds industry.
“Stronger reporting and increased transparency are vital for accurate performance measurement, which in turn can help make real estate an even more attractive asset class for investors,” he said. “As well as encouraging compliance with the new guidelines to improve consistency of reporting and governance, INREV are also promoting best practice throughout the industry, both of which we strongly support.”
The new guidelines have been launched three months ahead of the authorisation deadline for the Alternative Investment Fund Managers Directive (AIFMD), and INREV said they “acknowledge and reference” the new regulations “where needed”.
The changes also include greater guidance around frequency and level of disclosure of reporting, the inclusion of liquidity, such as redemptions, and fund terminations and extensions.