Real Estate Firms Ramp Up Their Pursuit of Accredited Investors
Real estate funds that used to exclusively target institutions are increasingly trying to appeal to retail investors.
Beth Mattson-Teig | Jul 14, 2021
Real estate investment managers seeking capital have traditionally tried to catch big fish and bypassed smaller fry. But increasingly these types of funds are adjusting their appetites and a growing cohort of fund managers, general partners (GPs) and private equity sponsors are launching funds and products aimed to luring in accredited investors.
Global investment management firm Nuveen is one example of this trend. Nuveen already has some $1 trillion in assets and $220 billion in alternative assets under management, and the firm is hoping to leverage capital from accredited investors to grow further. It recently announced an expanded partnership with iCapital Network that will leverage iCapital’s customized technology, service, advisory and distribution solutions to more efficiently reach investment advisors seeking access to real estate and private capital offerings for their clients. The solution is designed to overcome many of the long-standing pinch points to raising capital from individuals by automating the subscription, administration, operational and reporting processes across the life of the investment. In addition, earlier this week, UBS Group AG joined with Envestnet Inc. and iCapital Network to launch what they are calling the Alternatives Exchange "where high-net-worth investors and advisers will be able to browse, purchase and sell private investments such as real estate, hedge funds and private equity," according to a Bloomberg report.
The iCapital solution makes it easier for financial advisors to access alternative investments and take advantage of the return and diversification potential for their individual investor clients, notes Keith Jones, global head of alternative investment products at Nuveen. “Beyond providing a selection of Nuveen funds, iCapital provides automation that eases the investing and servicing processes of these investments for our wealth management clients,” he says. The majority of Nuveen’s private funds are now available to accredited investors. However, access also depends on the individual vehicle. For example, some funds are specifically designed for off-shore investors or for qualified investors that do not meet the level required for accredited investor status.
The focus on accredited investors and qualified purchasers has increased over the last decade with rapid acceleration in the past three to four years. “We are seeing more and more interest from our GP clients in raising capital from individual investors, and we’re seeing more appetite from individuals who want to invest with these GPs,” agrees Mike Mendelsohn, a principal at Hodes Weill & Associates, a global real estate advisory firm that provides consulting services and also does capital raising on behalf of asset managers.
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