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INREV: insurance companies dominate investor universe across seven major European markets

Insurance companies have a heavier weighting than pension funds in the UK, France, Germany and Italy, while pension funds dominate in the Netherlands, Sweden and Finland. Other investor types including family offices, foundations and investment trusts are present, but play a relatively minor role in each investment universe.

Insurance companies dominate the study sample with 62.4% of total AUM for all investment asset classes, followed by pension funds with 31.1%. The insurance companies, a number of them very large, were mainly located in France, Germany and Italy. In the other countries, pension funds dominated the study sample. In Sweden the category of ‘government institutions’ was also significant, though they too are primarily involved in providing pensions.

Analysing the INREV study sample by the number of individual investors in each country reveals a wider range of types across the 103 European investors responding to the survey. This reflects a significant number of smaller scale investors in addition to the larger insurance companies and pension funds, says INREV. Many of these fall into the ‘other’ category, a mixed group that includes charitable bodies in the UK, family offices in Germany and endowments in Finland.

The total real estate assets owned by investors in the study sample amounted to €509 billion, just shy of 10% of the sample across all asset classes (€5673.3 billion). As for all assets, insurance companies and pension funds hold the great majority of the real estate in the study sample.

There were also notable sample differences at a country level, particularly for the UK, where funds of funds accounted for 58.3% of real estate AUM; these are treated as a distinct investor category in the analysis, even though their ultimate ownership is primarily in the hands of pension funds and insurance companies, both domestic and foreign.

Based on data from their national statistical agencies, the UK has the largest investor universe among the seven countries, with an estimated €5,022 billion of assets under management (AUM) as at December 2018, followed by France (€2,196.5 billion), the Netherlands (€1,939.7 billion), Germany (€1,860 billion) and Italy (€990.7 billion). Equivalent data was not available for the full investment universe in Sweden and Finland, but an idea of their size is given by a total AUM of €541 billion for Swedish first and second-tier pension funds, which dominate that universe, and €193 billion for Finnish pension schemes, which play a similarly important role there.

james.wallace@realassetmedia.com