Compensation equals 78% of expenses after unprecedented headcount growth

Global Management Benchmarking Survey key takeaways

September 9, 2022


Real estate investment management firms experienced a year of rising revenues and expenses in 2021 - a trend that saw post-incentive EBITDA margins come under pressure, according to the results of the latest Global Management Benchmarking Survey.


The 2022 Survey, which tracks enterprise metrics including revenues, expenses, staffing, workload and governance for real estate investment management firms globally, revealed that a majority of survey respondents saw a slight increase in post-incentive EBITDA margins. Yet when assessed on a same-store basis, that trend reversed with a majority of same-store participants reporting a decrease instead.


The focus on EBITDA margins comes after real estate investment management firms reported a significant increase in the number of full-time employees (FTEs) in 2021 – and increasing compensation packages across the board for staff. Survey participants revealed that compensation accounted for 78% of all expenses firm-wide, as of 2021.


  • The Global Management Benchmarking Survey is the real estate investment management industry’s only global study of management practices and enterprise benchmarking metrics. Conducted by Ferguson Partners, the Survey is proud to have partnered with ANREV and INREV for one year and two years, respectively, and with NAREIM for more than a decade.

  • To access the executive summary, click here.


Headcount on the up: 

Real estate investment managers underwent significant growth in 2021 with six out of every 10 firms increasing headcount.


However, 2021 was just the start. Survey respondents said they expected the scale of FTE growth through 2022 to be even larger – and unprecedented in the decade-long history of reporting in the Global Management Benchmarking Survey.


According to the 2022 Survey, 60% of real estate investment management firms increased FTEs by a median of 5% in 2021. And when asked about headcount expectations for 2022, 80% of firms planned to increase FTEs in 2022, with 40% of organizations indicating they planned to grow their employee count by between 11% and 15% - the largest threshold tracked by the Survey. 


The Survey results have been distributed to participants but an executive summary can be accessed here. Real estate investment managers that are not NAREIM members should contact Zoe Hughes to request a copy of the summary report.


Additional key takeaways include:

  • Revenues: Rising expenses in 2021 were balanced against increases in revenues for a majority of firms. A total of 83% of firms surveyed said revenues increased in 2021, thanks to rising valuations, AUM and deal flow. Median net AUM growth, year-over-year was 15% in 2021 – up from just 6% in 2020. Transaction volume in 2021 also increased 65% YoY, while disposition levels were up 60% YoY.

  • ESG: The 2022 Global Management Benchmarking Survey highlighted the degree to which firms outsourced key functional areas within the investment management business. On ESG, two-thirds of firms retained ESG in-house, either in the real estate group or at the parent-level. Half of all firms (46%) also had a dedicated head of ESG, while 64% of firms surveyed had an ESG committee. For those with ESG professionals, the number of ESG FTEs ranged from 6 to 1.

  • Data: Another key area of focus, and expense, for real estate investment managers was data strategy and technology. Almost 4 out of 10 firms had a technology/data strategy committee, typically comprising 7 professionals including heads of technology, C-suite, heads of asset and portfolio management, as well as marketing professionals and heads of talent management.

  • Asset Management workloads: The Global Management Benchmarking Survey provides analysis on staffing organization and functional group process. Areas covered include portfolio management, acquisitions, asset management, valuations and governance. Highlighting equity asset manager workload, the Survey showed that in 2021 the median equity asset manager was responsible for between 9 and 14 assets, almost 100 tenants, $26m in NOI and almost $700m of gross AUM.


About the Global Management Benchmarking Survey:

The 2022 Survey was completed by 60 companies between March 2022 and June 2022. Just over 80% of firms had offices in the US, while 31% had offices in both Europe and Asia. The median employee count was 97 FTEs, excluding property management, while the median AUM was $9.8bn. The median firm revenue in 2021 was $76m, excluding incentive fees and real estate investment income.


  • Real estate investment managers that are not NAREIM members should contact Zoe Hughes to request a copy of the summary report.

  • To participate in the 2023 edition of the Survey, and access the full results, please email Zoe Hughes, zhughes@nareim.org.