Displaying items by tag: private equity

Thursday, 08 December 2022 16:17

PIMCO Launches Flexible Real Estate Income Fund

PIMCO recently announced the launch of the PIMCO Flexible Real Estate Income Fund (REFLX). The fund is the firm’s first real-estate-focused interval fund that will invest in public and private markets and will seek to harness the expertise and resources of its $190 billion commercial real estate (CRE) platform. REFLX will have the flexibility to invest in four distinct quadrants of the commercial real estate markets: private equity by acquiring stabilized income-oriented CRE, private real estate loans, public debt such as commercial mortgage-backed securities, and public equity such as REITs. Dan Ivascyn, PIMCO Managing Director and Group Investment Officer and head of the team managing the fund stated, “Higher yields and lower valuations in both public and private markets make for an attractive environment for patient investors ready to deploy funds in a flexible vehicle that can allocate investments across commercial real estate.” Similar to a mutual fund, interval funds are continuously offered. Investors can sell their shares back to the fund, but unlike a mutual fund, they may only be able to do so quarterly through the fund’s periodic repurchase offers.


Finsum:PIMCO adds to its stable of interval funds with the launch of the commercial real estate-focused Flexible Real Estate Income Fund.

Published in Eq: Real Estate

While institutional investors are allocating more to alternative investments, recent analysis has shown that the asset class does not help boost returns. Public Pension Investment Update: Have Alternatives Helped or Hurt? was run by the Center for Retirement Research at Boston College (CRR). It found that the investment performance of public pension funds from 2001 to 2022 averaged only 5.9%, despite increasingly larger allocations to private equity, hedge funds, real estate, and commodities. CCR looked at the returns for broad indices of alternatives and traditional equities before, during, and after the Financial Crisis. It found that alternatives substantially outperformed traditional equities from 2001 to 2007; and other than real estate, alternatives lost less than equities during the financial crisis. However, Jean-Pierre Aubry, associate director of state and local research at CRR and the brief’s author wrote that “Since the crisis, the performance of alternatives has been more mixed, with private equity and real estate rebounding somewhat, while hedge funds and commodities continue to provide lower returns.”


Finsum: A recent brief found that alternatives have not helped public pension performance due to mixed performance since the financial crisis. 

Published in Wealth Management

Based on a recent report from the Alternative Credit Council, the private credit affiliate of the Alternative Investment Management Association, private credit managers remain bullish on their business prospects heading into the new year. In fact, more than 80 percent of global private credit managers are either bullish or cautiously optimistic about the market’s prospects over the next 12 months. The report was based on a survey of 54 private credit managers with $805 billion in combined assets. The optimism comes at a time when more investors are looking to increase their allocations to private credit next year. This was highlighted by a recent survey by Ernst & Young. According to the report, many private credit managers are taking advantage of this tailwind by expanding into new geographic locations. The report said, “Much of this growth is being led by the private equity market, which continues to spearhead private credit’s expansion into new markets. This development is likely to prove valuable for the European and Asian economies as they seek to diversify the sources of financing available to borrowers.”


Finsum:Due to an increase in interest from investors, private credit managers are optimistic about their business prospects heading into the new year. 

Published in Wealth Management

According to a recent survey released by professional services firm Ernst & Young, institutional investors are showing more confidence in alternative assets. The 2022 EY Global Alternative Fund Survey revealed that approximately 75% of institutional investors felt their alternative asset managers "met or exceeded performance expectations during a challenging and volatile market period, successfully protecting capital in down markets while positioning for long-term income generation." Private equity received the best feedback with 50% of institutional investors citing the outperformance of expectations of this asset class. This was followed by real estate strategies at 45% and real assets/infrastructure at 38%. While the majority of investors expected to keep their alternative asset allocations constant, investors that are expecting to make changes stated that "they will increase their allocations in the next three years." The survey also found that in response to rising demand, alternative fund managers are increasing their product offerings in areas such as illiquid credit, real estate, private equity, venture capital, and opportunistic or special situations.


Finsum:Based on the results of a recent Ernst & Young survey, institutional investors are showing more confidence in alternative strategies such as private equity and real estate. 

Published in Wealth Management

During a recent briefing, Blackstone's private wealth management solutions group explained that private equity and other alternatives have been well suited to perform during volatile times when traditional stocks and bonds have fallen. This has been certainly true this year as equities, government bonds, and most corporate debt have fallen as inflation and interest rates rise and recessionary concerns persist. Private markets and hedge fund strategies, on the other hand, have fared much better. However, the firm also believes that affluent investors are still under-allocated in alternative investments. According to the firm, affluent private investors typically only allocate about 5% to alternative investments. Joan Solotar, Global Head of Private Wealth Solutions at Blackstone told journalists at a briefing in London that “Investors remain under-allocated. Many advisors have found that if they hadn’t allocated to alternatives, then they underperformed. Some advisors, such as those working for decades without ever having broached the alternatives space, might lack the confidence to take the plunge.” Her colleague, Rashmi Madan, Head of EMEA for Private Wealth Solutions said the reason for this is due to a combination of burdensome administrative tasks and the difficulties investors have had accessing drawdown funds.


Finsum:Blackstone stated during a recent briefing that alternatives perform well in volatile markets when traditional securities falter, but affluent investors are still under-allocated.

Published in Wealth Management
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