Read the 2019 Fall Dialogues here
One look at the 2019 NAREIM–FPL Associates Global Management Survey — which provides the industry’s only operational and enterprise benchmarking data — quantifies the trends that are reshaping our business. These trends include:
• Product complexity. Over the past decade, the median number of active investment vehicles managed by GPs has risen from seven in 2009 to 12 in 2018, while the number of managers investing across all four real estate quadrants (public equity and debt, as well as private equity and debt) more than doubled between 2015 and 2018.
• Capital complexity. Since 2009, the amount of capital raised from defined benefit public and corporate pensions has decreased from a combined 62% of all capital raised in 2009, to just over half in 2018. As a result, managers are looking elsewhere to raise capital, including to retail and defined contribution plans, which eight out of 10 managers said would be somewhat or very important to their business over the next three years.
Couple these challenges with increased requirements relating to regulation and compliance; the pressures of industry consolidation (both in terms of manager consolidation and the desire by LPs to consolidate their investment partnerships); and the management of asset, portfolio, fund and investor data; to name but a few, and it’s clear running a real estate investment management business requires more attention and resources today.
Over the past year, NAREIM members have shared insight and intelligence on some of the biggest challenges impacting their business. Read their insights in the fall 2019 issue of Dialogues here.