ANREV membership has doubled in a year and local commitment to its mission is impressive. Local differences are among the challenges facing the organisation, writes Andrea Carpenter whose move to ANREV will help smooth the path towards greater transparency and best practice in Asia

The first challenge in jumping from INREV to ANREV was a linguistic one. There may be just one letter difference between INREV in Amsterdam, where I worked for more than three years, and the move to ANREV, its sister organisation in Hong Kong covering Asia, but saying the right name in the right place (often in front of audiences) took me several weeks to master.

However, that problem actually became symbolic of my observations of the difference between ANREV and INREV. The names may be different but the issues are the same. All businessmen and women know that they ignore local cultural differences at their peril. But whether it is investors looking to invest internationally for the first time or fund managers seeking to benefit from a streamlined due diligence process, it is all happening here as it has happened, or continues to happen in Europe, but with an Asian twist.

My time with ANREV began as a three-month secondment from INREV and has now extended to me working for ANREV for a further six months to continue to support its aims of transparency and best practice for non-listed property funds in the region. The two organisations work closely together and my initial INREV mandate to support the adoption of the Guidelines in the region and to ensure compatibility of research output and initiatives here in Asia continues to be a high priority.

The INREV Guidelines are being particularly well received in the region. The influence of both European investors already familiar with the Guidelines, and fund managers with a global footprint, means that awareness is good and adoption is already underway.
Support from local and regional players has been strong and two successful training courses in the region in January by regular European trainers Jef Holland of Deloitte and Angela Crawford-Ingle of Ambre Partners, began the process of practical support in the region.

The trainers were impressed at the attendees' high levels of engagement and absolute commitment to know the detail of, and put in place, the full set of Guidelines. Those involved in reporting and fund valuation in Asia look likely to be a force to be reckoned with in terms of challenging all aspects of the Guidelines and their practical implementation in the region - a test that both INREV and ANREV will welcome to ensure the highest standards.

Attendees' attention to 100% of the detail may partly be a cultural difference but it also has to be remembered that, unlike Europe, Asia did not live through the development of the Guidelines from eight separate sets to one integrated document. It has had no chance to warm up with the Corporate Governance Guidelines before adopting INREV Net Asset Value (NAV) and INREV Fee Metrics. Instead, the INREV Guidelines arrived fully integrated in one document. Their enthusiasm to swallow them whole is to be commended but ANREV will ensure there is support to do this and one priority project is a document detailing regional guidance and support on current market practice. In addition, we are working on translations of the INREV Guidelines into Korean, Japanese and Chinese.

This all-in-one approach can also have its drawbacks. Entry at the ground floor for Europe means that it adopted the recommendations together progressively. Here in Asia, a cold start means that some aspects can cause confusion.

ANREV's aim to improve transparency of approach is sometimes confused with transparency of markets. What the Guidelines promote is transparency of the investment approach, which institutional clients will always rightly demand, rather than worries over sanitising markets.

Fund managers also raise concerns about standardisation leading to a loss of individuality, especially with the Due Diligence Questionnaire (DDQ). The worry is again misplaced as the DDQ only supplements the marketing material of a fund to provide a common base and in this market investors welcome further insight into fund manager track record and experience.

A simple antidote to this confusion is also to make the adoption here progressive by identifying the basic building blocks for the market. This will most likely be the Due Diligence Questionnaire, INREV NAV, the reporting guidelines and fee metrics.

For other markets, it is about emphasising certain benefits of the Guidelines. In more mature markets, such as Australia, reporting standards are high but this does not mean the Guidelines are not necessary. In many cases reporting is already close to that which the Guidelines recommend, merely reinforcing their applicability. However, the attraction of the Guidelines here is to complement this quality with standardisation.

One other main priority for 2011 for ANREV is the development of the ANREV Index, sister to its successful, and now quarterly, index in Europe. Again, INREV will support ANREV in its development as it sees the Index as an important next step in working towards a global industry index.

ANREV will develop an action plan to set out the next steps to give the market the index to best match its requirements. With 48% of opportunity funds in the universe compared with 10% in Europe, there are already clear differences that need to be considered in terms of methodology, for example.

ANREV reached its 100th member this January, almost doubling from 52 members one year ago. This more than establishes ANREV's focus and mandate to support non-listed property funds in the region and allows its priorities for 2011 including the Index to benefit from the expertise within its membership.