Fundraising – Preqin’s Real Estate Online features in-depth information on 21
Fundraising – Preqin’s Real Estate Online features in-depth information on 21 solely France-focused private real estate funds closed since 2007, including information on strategy and geographic preferences, fundraising data, known investors and managers’ performance track records. Fundraising between 2007 and 2012 was fairly consistent, with only 2011 standing out in terms of capital raised that year (Fig 1). No solely France-focused funds closed in 2013; however since then, fundraising in the country has bounced back and surpassed any amount raised pre-2013. With just under half a year remaining, 2015 could be a record year for France-focused private real estate fundraising.
Higher risk value added and opportunistic strategies focusing on France secured similar proportions of capital to lower risk core and core-plus funds, despite higher risk strategies representing 48 per cent of total funds closed since 2007. Nearly half of funds that have reached a final close since 2007 target a diversified range of properties, with a notable 29 per cent targeting offices.
Fund Managers – The largest proportion of France-focused funds (62 per cent) and capital (69 per cent) since 2007 were raised by fund managers headquartered in France (Fig 2). Aside from France itself, UK-headquartered managers have raised the greatest number of France-focused vehicles, with five funds having closed, raising an aggregate EUR1.3 billion. Nearly all (93 per cent) of the 28 France-based real estate fund managers tracked by Preqin’s Real Estate Online are based in Paris, with only two firms based outside the capital, located in Marseille. Collectively, these firms have raised over $23 billion in closed-end private real estate funds in the last 10 years, and they currently have an estimated $10.2 billion available to invest. AXA Real Estate is the largest contributor to these figures, raising 61 per cent of the aggregate capital in the last 10 years and holding 71 per cent of the dry powder available to France-based managers.
Institutional Investors – Preqin’s Real Estate Online contains detailed information on the 41 France-based institutional investors active in real estate, including current and target allocations, strategic and geographic preferences, past commitments and future investment plans. As shown in Fig 3, insurance companies make up the largest proportion (41 per cent) of real estate investors within France, with private wealth firms representing a notable quarter of the investor population. As insurance companies are some of the largest investors by assets under management (AUM), it is unsurprising that 71 per cent of France-based investors hold more than EUR15 billion in AUM, including 29 per cent with over EUR100 billion in assets.
It is interesting that France-based investors frequently focus on direct investments in comparison to investors based in the rest of Europe; 91 per cent of France-based investors will invest directly in real estate, while only 56 per cent do so in other areas of Europe. This trend is reversed when looking at preferences for private real estate funds, with France-based investors less likely to invest than their European counterparts. Nearly half of these investors currently hold less than 5 per cent of their total assets in the real estate asset class; however, with 93 per cent maintaining a target allocation of 5 per cent or higher, there could be significant flows of capital into real estate in the mid- to long term.
As mentioned previously, high- and low-risk France-focused private real estate funds have generally secured equal proportions of capital since 2007, reflecting the appetite of France-based investors; core, value added, core-plus and opportunistic funds are favoured by 79 per cent, 71 per cent, 64 per cent and 50 per cent of investors respectively (Fig 4). A clear domestic-bias exists among France-based investors: 87 per cent will invest in private funds focused on their home region, far above the proportion that invest in global- (22 per cent) or North America-focused (13 per cent) funds.
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