PERE Investor Perspectives 2020

While PERE’s latest fundraising figures might suggest investors have lost faith in private real estate in the last 12 months – $135 billion was raised in 2019, the second lowest figure recorded in seven years, and just 181 funds closed, down from 337 in 2017 – the findings of our Investor Perspectives 2020 survey indicate that institutional interest in the asset class is very far from down and out.

Just 10 percent of investors polled report they are overallocated to the asset class going into 2020, with 32 percent saying they are underallocated. Further, 35 percent of respondents are looking to commit more capital this year. Only 9 percent say they will invest less. Investors are also largely content with the performance of their investments with 56 percent saying the asset class either met or exceeded benchmarks in 2019  – only 7 percent feel they were short changed. Happily, private real estate is expected to deliver in 2020 too, with 65 percent of investor respondents foreseeing benchmarks being met or exceeded. Just 15 percent anticipate performance will fall short.

So, despite a quieter fundraising year in 2019, it would be premature to press the panic button. Private capital is out there and eager to take up residence in property in the months ahead.