Nearly two-thirds of all sovereign wealth funds invest in real estate as the search for return drives capital flow away from traditional asset classes, according to Preqin’s 2017 Sovereign Wealth Funds Review.
About 63% of sovereign wealth funds invest in real estate – four percentage points more than in 2015 – while the number of funds investing in fixed income has fallen from 86% to 78% in the same time.
Every fund with more than $100bn in assets has money tied up in real estate, reflecting those funds’ ability to build a diversified, global portfolio. By contrast, only 36% of funds with less than $1bn in AUM invest in real estate.
More than half of all sovereign wealth funds with property investments are based in the Middle East or Asia, while Europe remains the most popular target, with 63% funds regarding it as a key region.
The study suggested that some of those with no real estate exposure have been constrained by regulations that restrict them to certain asset classes, such as equities and fixed income.
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette
