Fund of funds: Non-listing is good for Europe
Thomas Brown, Clerestory Capital Partners
The European fund of funds market has grown quickly off the back of a proliferation of non-listed property funds in Europe. As the number of funds has grown, investment selection and underwriting has become more difficult and funds of funds have played an important role for the sector – for domestic investors investing outside their country for the first time and for smaller investors. The growth of funds of funds will continue in Europe and managers will look to further distinguish their strategies.
The private equity funds of funds market is a template for how this sector might grow, which in part has been driven by the capital base and the type of investor. The possibilities for further capital coming into the real estate funds of funds market are also very high. Of the €7.4 billion targeted for Europe, the majority is intra-regional, and the story is the same for the US sector.
However, in Asia, capital going into funds of funds has been truly international, demonstrating how the sector can be a good point of access to new markets.