Capital raising in non-listed sector bounces back: INREV

Non-listed real estate vehicles raised EUR 10.5 bn in new capital in 2010, according to the INREV Capital Raising Survey. This marks an increase of 80% on the EUR 6 bn raised a year earlier. A similar amount is expected to be raised in the coming year, Lonneke Löwik, INREV, Director Research and Information, told a press conference at the annual INREV conference currently being held in Venice.

'This marks a big improvement over 2009,' Löwik said. She added, however, that only 25% of the respondents actively raised capital last year. About 20% of the respondents raised capital for alternative non-listed products such as real estate debt funds, separate accounts and joint ventures. The largest share - or EUR 2.1 bn - was raised for separate accounts.

The non-listed sector also turned in a significantly better performance in 2010, said INREV CEO Matthias Thomas during his introductory words at the conference. According to preliminary figures, the INREV index booked total returns of 7.4% last year after declining 7.8% in 2009.

With regard to new capital raising, pension funds continue to be the main source by investor type, representing 61% of raised capital in 2010, followed by fund of funds with 8%. Life insurance funds saw a decrease of nine percentage points, which Löwik attributed to the uncertainty surrounding the introduction of the Solvency II regulation.

Germany remains the largest source of capital, while the UK remains the most popular target destination. And investors from the US and Canada seem to be returning slowly to the European market, albeit not at the levels seen before. While most continental European investors focused on core funds, US, Canadian and Asian investors preferred value added. Only UK investors invested in opportunity funds in 2010.