Real Estate Funds Shift Focus from Retail Investors as Market Trends Change

Investec Launches Real Estate Equity Fund for Institutional Investors

Investec has recently introduced a new real estate equity fund, named ‘REALIS,’ with the goal of deploying £250 million over the next two years. This strategy is specifically targeting institutional investors and high-net-worth individuals, distinguishing itself from real estate funds aimed at retail investors, which have experienced significant withdrawals in recent years.

The decision to make the fund accessible only to institutional investors suggests a shift in focus towards a more stable market. Last month, Legal & General Investment Management converted its £1.2 billion open-ended property fund into a hybrid model, reflecting the changing landscape of real estate investments.

REALIS will concentrate on two primary markets: asset development or repositioning in highly liquid markets, and distressed transactions with strong long-term fundamentals. The fund’s first investment involved the acquisition of a 45,500 square foot office in Guildford, funded by equity commitments from investors in the UK, Channel Islands, Switzerland, and South Africa.

Yon Papageorgiou, head of real estate equity investments at Investec, emphasized the strategy’s unique approach, combining Investec’s extensive track record, data-driven investment method, and network of top-tier operating partners. Mark Bladon, head of Investec real estate, highlighted the demand for UK real estate investment among global clients and the benefits of accessing it through a reputable platform led by an experienced team.

As real estate funds adapt to changing investor preferences, Investec’s REALIS fund represents a strategic move to target institutional investors seeking attractive total return characteristics in the UK real estate market. With a focus on off-market opportunities and a proven execution strategy, Investec aims to deliver significant outperformance for its investors.