Brookfield Asset Management has edged out Blackstone to become the world’s largest real estate manager with $113 billion under management, according to a combined industry group survey.
The two property giants have passed the crown several times, with Blackstone in first place at the close of 2013 and Brookfield winning the year prior.
Total real estate assets held by fund managers hit just shy of $2 trillion as of December 31, 2014, according to data compiled by INREV, the European Association for Investors in Non-Listed Real Estate Vehicles.
“This survey clearly reflects the continuing domination of the large players and an enduring trend for consolidation,” said Henri Vuong, INREV’s research and market information director. “It’s a trend that’s been driven by the economies of scale, or the desires to tap into new markets and expertise, and it’s one that is likely to accelerate rather than unwind in the immediate future.”
Institutions accounted for the lion’s share (85%) of capital flowing to these real estate giants, with retail (9%) and co-investment managers (5%) making up the balance.
Source: INREV/ANREV/NCREIF Fund Manager Survey 2015
Pension funds, however, have dialed back their involvement in the sector substantially since last year’s survey. At the close of 2014, retirement systems contributed 42.8% of invested real estate assets, down from 50.4% the year prior.
Where pensions have fallen off, insurance companies have more than made up the difference. INREV’s data showed a nearly five-fold increase in insurer’s share of real estate investments year-on-year, climbing from 3% to more than 14%.
High-net worth individuals and funds-of-funds have likewise boosted their allocations, according to the survey.
INREV’s analysts noted the increasing diversity in both sources of institutional capital the products on offer—two trends that Vuong predicted to continue apace into next year.
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