Trends in non-listed RE Nordic pension funds March 2009.

Trends in non-listed RE Nordic pension funds March 2009

Trends in non-listed real estate investment strategies of Nordic pension funds

Independent research under pension funds in Norway, Sweden, Denmark, Finland and Iceland

44 Nordic pension fundsAuM at least € 0.5 billion


Hypothesis 1: pension funds in Nordics will increase their investments in non-listeds in coming years


Hypothesis 1:

Outcome:53% of pension funds will expand investments in non-listed re15% allready has increased investments and target is set31% no non-listed re, no plans to invest in non-listed


What about increase in non-listed RE and the crisis?

Some firmly persuit their defined policy and increase investmentsOthers still want to invest in non-listed RE but the timeframe?


Why do pension funds invest in non-listed RE:

Because of the (relatively) high price of domestic RE

The forecast yields are perceived as attractive

The desire to diversify the portfolio globally in order to reduce risk


Hypothesis 2: pension funds in Nordics manage

their non-listed holdings as passive shareholders

Outcome: 35% is passive shareholder 65% is active shareholder


What about being active/passive shareholder and the crisis?

Last yr 56.7% of the pension funds perceived themselves as passive therefore there is a rise in involvement because of the:- hurting impact of the crisis - increase of capital invested


Hypothesis 3a: Nordic pension funds do not actively perform financial hold/sell analysis

Outcome:70% does not perform financial hold/sell analysis


Hypothesis 3b: Nordic pension funds do not

actively perform strategic hold/sell analysis

Outcome: 42% does not perform a strategic

hold/sell analysis


strategic hold/sell analysis and the crisis:

Most of these pension funds want to execute such an analysis next year. Some of them study on how

Other pension funds will execute analysis not yearly but halfyearly next year

Trends in non-listed real estate investment strategies of Nordic pension fundsHypothesis 4:Nordic pension funds would not consider

terminating their investments in a closed-end non-listed r.e. fund before termination date

Why terminate: Overweighted IRR criteria are not realised

Why not terminate: Political (internal) implications Club deal Relational damage


Hypothesis 4: Nordic pension funds would not consider terminating their investments in a closed-end non-listed r.e. fund

Outcome:Slightly shift in attitude:2 pension funds have terminated with good experience, 3 pension funds are considering it. Creating alpha gets more important

Real Estate Capital Advisors

Lymos is an independent advisor for pension funds and real estate funds on strategic issues and operational issues

Lymos BV Real Estate Capital Advisors

WTC Schiphol

Schiphol Boulevard 293

1118 BH Schiph0l

The Netherlands

www.lymos.eu

[email protected]


Thank you for listening!

Mariëtte Meulman

Trends in non-listed RE Nordic pension funds March 2009.

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