2022 DC Survey: Key Takeaways

Almost $80bn of defined contribution capital is currently invested in private real estate - with 40% of that capital invested in non-DC specific vehicles open to all categories of investors.

According to the results of the 2022 Defined Contribution Survey, released in collaboration with NAREIM, the DC Real Estate Council and Ferguson Partners, $79.4bn of DC capital was in private real estate, including $16.9 billion in vehicles structured for DC investors, while $31.2 billion was in vehicles open to all categories of investors, and $31.3 billion in vehicles open to 403(b) DC plans.

• One key takeaway also revealed that 66% of managers experienced net inflows into their funds in 2021 - with 40% of those commitments coming from new investors or new mandates.

The DC Survey is an annual benchmark survey tracking capital raising from DC into private real estate as well as structuring, liquidity and staffing metrics. You can download an executive summary of the report here.

 

The report will also be discussed during PREA next week at 2 special meetings:

• Oct 18: DC Real Estate Council, Mayer Brown's office, 1999 K St, 4.30pm. Register here

• Oct 20: PREA DC affinity group meeting, Cabin John/Arlington Room, 12.15pm. 

Survey highlights: 

Among the key takeaways from the Survey were:

• Liquidity: While the industry saw net inflows of DC capital into private real estate, liquidity remained a critical issue with 2021 witnessing $2.5bn of inflows and $2.1bn of redemptions. The average liquidity sleeve was 13%.

• Commitments: New DC capital is going to private real estate. In 2021, 66% of managers experienced net inflows into their funds. Four out of 10 of those commitments came from new investors or were new mandates.

• Managers with a 5-yr track record of managing DC capital, grew AUM by more than 40%.

• Staffing: 66% of Survey respondents use existing real estate or institutional staff to target capital raising in the DC market. For managers with $1bn AUM or less, firms employed 1.5 FTEs.

DCREC Meeting

Join DCREC members following their board meeting on Oct 18 to discuss the work of the DC Survey taskforce and dig deep into the findings from the 2022 report, including net inflows into the sector from new investors and new mandates. The meeting takes place at 4.30pm on Oct 18 at Mayer Brown's offices on 1999 K St. Register here

PREA DC affinity group:

To understand more about DC capital flows, structures and liquidity – and to hear more results from the 2022 Defined Contribution Survey – join NAREIM and DCREC at the PREA DC affinity group meeting on Oct 20 at 12.15pm in the Cabin John/Arlington room. Attendees must be registered to attend PREA.

The meeting will discuss the 2022 Survey results plus hear from recordkeeper Mission Square on the three-year process of including private real estate within their target-date funds. The meeting will also provide a regulatory and valuations update.