Several of the top real estate investors in Europe are among the supporters, alongside the Royal Institution of Chartered Surveyors (RICS), of an initiative to spotlight effective investment risk management techniques in commercial property investment.
The founders of the Global Investment Risk Management Forum (RMF) say that the importance of effective investment risk management cannot be overstated given that the industry saw $1.2 tln (€1.06 tln) in real estate transactions during 2015.
The investors supporting the initiative include: Aberdeen Asset Management; Alpha Investment Partners; AXA Investment Managers - Real Assets; Benson Elliot Capital Management; CBRE Global Investors; GLL Real Estate Partners; LaSalle Investment Management; M&G Real Estate; Morgan Stanley Capital; PGIM Real Estate (formerly Pramerica Real Estate Investors); Schroder Real Estate Investment Management; UBS Asset Management; Union Investment Real Estate; WealthCap and WT Fund Management Pte
The RMF is the first initiative of its kind, according to RICS, and gathers together CEOs, chief investment and risk officers from major institutional real estate investors, with the aim of developing the sector's approach to risk management. In total, the RMF represents more than $1 tln in assets under management (AUM).
Convened by RICS, the RMF meets regularly in London, New York and Singapore. In addition to sharing best practice and insights on trends shaping the real estate landscape, the RMF also engages risk management experts from other sectors, including insurance, equities and pensions markets.
Fiduciary duty
'With the global financial crisis still fresh in the public psyche, the RMF demonstrates that the industry is taking its fiduciary duty seriously,' said Martin Brühl, RICS president & managing director at German fund manager Union Investment Real Estate. 'We want to share knowledge on risk management, to develop our thinking as a sector and to lead by example when it comes to managing investment in a responsible and sustainable way.'
He added: 'The RMF initiative is our response to today’s anomalies in the interest of greater financial stability: an artificially low interest rate environment engineered by central banks, competitive devaluation of currencies and a magnitude of asymmetric geopolitical risks, including the British EU Referendum, may lead to misallocation of funds and mispricing of risk.'
Philip Barrett, forum member and global chief investment risk officer at PGIM Real Estate, commented: 'A strong focus on investment risk management is an integral part of our investment process at PGIM Real Estate. We are pleased to support RICS in the launch of this global forum which will enable us to share investment risk management best practices with our peers.'
The long-term aim of the initiative is to embed an industry-wide dialogue on risk management and to ensure investment leaders and their clients, including the public at large, benefit from the collective insight.
