GLOBAL - Appetite for gearing levels in real estate funds has diverged between European institutional investors and those based in the US, according to a multi-manager.

Jeremy Plummer, managing director of CBRE Investors' global multi-manager business, told IPE Real Estate that unlike European pension funds, US investors were not pushing for more conservative gearing levels from fund managers.

Fund managers are increasingly offering reduced gearing levels - or even zero leverage - in new vehicles, in response to lower appetite for leverage among investors and a more limited supply of debt financing.

But Plummer said he had seen less of a change among US investors when investing in markets outside their home borders.

"There is clearly more conservatism coming from the Europeans and Australasians," he argued.

"The return-seeking mentality of US capital outside the US still seems willing to accept high levels of gearing."

Plummer said he was aware of prospective investors disagreeing over the optimum gearing levels for new funds in the market raising capital.
US fund of fund managers were pushing for maximum gearing levels in one fund, while CBRE Investors and a number of Dutch pension funds were asking the manager to implement a more moderate level, he said.

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