INDIA - Russell Investments sees potential for investing in private real estate in India and expects tremendous opportunities for distressed assets in Europe with that region's sovereign debt crisis, according to IPE sister publication IPA.
India, although a developing market in terms of private real estate, is attractive because of the availability of good commercial assets, with a tenant mix similar to those in some US cities, said Derek Williams, director for private real estate at Russell Investments.
The fund of funds manager is likely to make a commitment there in the next 6-12 months, he added.
"We can get access to the right fund manager and income-producing assets in India, and the pricing entry points seem very attractive."
Private equity real estate is relative new in Asia, and the market is still evolving, he added.
"Russell is committed to Asia, and it's definitely going to be a larger portion of global assets that we run," he said. "It's just a question of handcrafting the timing associated with going into the markets."
China, for example, is less attractive, although the country is similar in fundamentals and demographics to India.
"The reality is that there is a lot of uncertainty with investing in China (real estate), and that might be one market where it's good to wait on the sidelines," Williams added. "Repatriating your profits out of China can be very costly."
The US is a more attractive market, with a very efficient real estate system, and Russell has continued to invest there.
The fund of funds manager has attracted fresh capital from a non-US investor, targeting the distressed property market there, according to Williams.
He said he also saw "fantastic opportunities" to commit to "overleveraged structures owning good real estate" in Europe, mostly related in the commercial property sector.
"Even if you think things are going to break up from the euro perspective, that can create tremendous opportunities," Williams said. "The European distressed market, we're going to commit to funds pretty quickly from there."
Russell sees rising interest in partnerships with emerging managers, as well as startup and boutique managers still building their assets.
"There's no legacy assets, or legacy situations," Williams said. "With a startup manager, it's starting with a clean slate, and that's a very powerful position to be in. So, if you really want to invest globally in real estate via funds, you just have to appraise emerging managers."
