EG FINANCE & INVESTMENT SUMMIT: What opportunities are sovereign and giant pension funds targeting?
“I’m not sure we see value anywhere,” said Tom Jackson, director, real estate investments, Canada Pension Plan Investment Board. “Everything is expensive.” The pension fund does not have a target allocation for real estate investment, so Jackson has to compete with private equity and fixed income teams to allocate capital.
However, he admitted he did see long-term opportunities in student housing and PRS sectors.
“We take a very long-dated investment horizon to approach real estate,” he said. “We’re looking to access sectors where we see a route to material scale. We think capital probably follows talent over the long term. For example, we have made a huge investment in UK student housing space.
“I think we’ll continue to build on that platform. A natural extension of that platform is to go into the private rented sector in the UK. So that sector is a focus for us.”
M&G Real Estate chief executive Alex Jeffrey said UK residential would continue to be an area of focus for the investor owing to the underlying supply-demand imbalance. He said M&G was exploring ways to invest more in affordable housing to create new assets with a service quality which is good for society. “There are 4.5m people renting in the UK, 95% from unprofessional private landlords,” he said.
Stephane Jalbert, managing director, real estate investment, PSP, said the fund was positive on the alternatives and value-add opportunities in Europe. “We are going to focus on sectors that are more commercially driven than the simple core buildings,” he said.
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