Strong interest in alternative products catches fund managers off-guard

The recent surge of interest in alternative non-listed products has caught many fund managers off-guard, leaving them unable to provide investors with a satisfactory track record in these products.

That was one of the findings of a seminar held last week by INREV on the growing array of alternative non-listed products.The quality of the underlying assets is the key driver behind investors' strategies for non-listed real estate investment, the seminar heard.

‘Alternative products are firmly on investors’ radar. But the fact that they are mostly focused on the underlying assets is an interesting insight. It demonstrates where investors’ priorities really lie,’ said Matthias Thomas, CEO of INREV.

Investor interest in alternative products - such as JVs, club deals, real estate debt funds and infrastructure funds - has soared in the wake of continuing economic turmoil. But the underlying assets take priority over the type of alternative product investors opt to invest in.

In a recent report on the subject, INREV highlights the need for greater clarity around the plethora of alternative non-listed products. The industry lacks a common understanding of these products and while JVs and club deals are nothing new, there is a perception that they are relatively opaque. This could set the non-listed funds industry back in terms of its drive to increase transparency and corporate governance, the report concludes.

Commenting on the report, Patrick Kanters, managing director Global Real Estate of APG Asset Management and newly appointment chairman of INREV said: ‘Understandably, some investors are asking questions about the type of investment products that suit them best and that’s why we’re hearing more about joint ventures, club deals, real estate debt funds and infrastructure funds. INREV has an important role in leading this debate, not least because all these alternative structures should be bound by the same rigours and disciplines of governance and transparency that apply to traditional non-listed funds.’