At least six more open-ended core funds will launch this year, says advisory firm Hodes Weill.
These start-ups would follow recent launches by TH Real Estate, AXA IM – Real Assets and AEW Europe.
Hodes Weill made the prediction in its annual update on the real estate funds market.
Will Rowson, partner at the firm, said the market was not open to all as “real diversification only comes from funds sized above €1bn (£789.4m) and well beyond”, suggesting that only established management teams will enter this market in the coming months.
Capital is beginning to flow to the funds as the result of a global underallocation to real estate by the world’s largest investors.
Open-ended core funds have been a well-established element of the US market since the 1970s. These vehicles now have total AUM of more than $150bn (£105.6bn).
Few European managers have thus far been able to build scale owing to the relative scarcity of assets.
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