Fund managers encouraged to contribute data to INREV index

Some of Europe's largest institutional real estate investors have called on fund managers of non-listed property funds to bolster the INREV index by contributing data on their own vehicles.

Begun in 2001, the INREV index is compiled by the European Association for Investors in Non-listed Real Estate Vehicles (INREV) and measures annual net asset value-backed performance for institutional and retail non-listed property funds invested in Europe. In 2006, the index covered 206 funds with a total net asset value of EUR 153 bn. It has sub indices by country, property sector, vintage and gearing levels and this year is introducing a sub index tracking performance by investment style.

'INREV has made great strides in bringing transparency to the market, but the INREV Index is not yet mature, we need longer data time series and more managers to disclose the information on the funds,' Patrick Kanters, managing director for global real estate at Dutch pension fund APG, said in a statement issued from INREV. APG traces about 45% of its EUR 20 bn in property investments to non-listed real estate.

Michael Nielsen, managing director and partner at Denmark's ATP Real Estate, which has allocated EUR 1.53 bn to the non-listed sector, noted non-listed property funds had to compete for institutional capital with other investment asset classes such as equities and bonds, which have comprehensive and long-term market indices. For its part, ATP questions fund managers on whether they are prepared to deliver data to INREV and incorporates a clause in the investment contract on data provision to INREV.

Going forward, INREV chief executive Lisette van Doorn said developing a reliable performance benchmark will be the only way to properly measure risk-- something that is a priority for investors and fund manages-- of non-listed property funds.

INREV will release its 2007 index at its annual conference in Istanbul on 24 and 25 April. There is a general consensus that it will be lower than the 2006 return of 20.9%.