UK - Institutional investors - including pension funds - are getting more involved to decisions made by real estate fund managers as value-adding strategies become the differentiator between UK funds, according to Arlington Securities.
Not only are institutional investors are more likely to demand regular updates on the fund's performance; they are also scrutinising the nature of property acquisitions and demanding to know where fund managers see the next opportunities, according to Rod Ross, lead fund manager on Arlington's UK balanced property fund.
"Investors have an increasingly sophisticated view of the market," he told IPE Real Estate.
He was speaking as the Macquarie subsidiary appointed two additional recruits to its UK balanced property fund. The fund, which launched in March 2005, has raised £140m (€206m) to date.
Fund analyst Nicola Francis will scrutinise trends within the fund and, notably, make strategic decisions on leveraged investments while new fund manager Louise Greenan will "develop and take forward" active management of the fund's holdings.
Ross signalled active strategies were essential to squeeze value out of a saturated market.
"We've had three years of extremely high property returns. There's still good value to be had, but not at those returns," he said.
"Delivering additional capital growth to investors will be the differentiator between funds. They'll increasingly see through funds without the skills or resources to deliver it."
