Invesco Real Estate, the £67.2bn global real estate investment business of Invesco, has today (9 January) announced that is has been appointed by Legal & General’s Private Markets Access Fund to provide real estate exposure in the US and Asia.
The partnership follows the announcement of L&G’s Private Markets Access Fund in July, launched to provide the benefits of private markets exposure to its 5.3 million defined contribution (DC) members.
Structured as a Fund of Funds, it brings together a range of different private market opportunities, the global real estate component of which will be managed by Invesco.
Pension scheme members invested in L&G’s Fund will benefit from Invesco’s direct property exposure spanning the US and Asia Pacific developed markets. Providing access to global direct real estate increases the range of investable opportunities and offers the potential to reduce risk and enhance returns.
Investors will also benefit from Invesco Real Estate’s active approach to sustainable investing, which aims to reduce risk and enhance performance by providing better buildings (e.g. optimising building utility performance); utilising frameworks to support investment decisions and to future proof assets in a changing market.
Sachin Bhatia, head of UK Institutional & EMEA Consultant Relations said: “Increasing the ease of access to private markets could offer great investment opportunities when looking to drive better outcomes for members of DC pensions schemes. However, despite longstanding demand from DC schemes to invest in global real estate, this asset class has often been the preserve of the largest institutional investors and sovereign wealth funds. L&G shares our belief that DC members deserve the same opportunities.”
Simon Redman, managing director, head of DC and Wealth, Invesco Real Estate added: “With generally low correlation to other asset classes and historically strong performance across market cycles, real estate has long served as a powerful diversifier in mixed-asset portfolios.
“Although real estate investors have historically tended to be domestically focused, we are increasingly seeing demand for international opportunities. The UK comprises less than 5% of global investible real estate, so by investing globally, DC members can benefit from a much wider range of stable income opportunities backed by physical buildings, with significant diversification benefits, risk reduction, and return enhancement.
“Bringing global real estate to Defined Contribution pension members is a strategic priority of Invesco Real Estate. There is no doubt that allocating to global real estate has the potential to significantly improve member outcomes, but it requires focus and innovation to do so. We are very pleased to see this focus and creativity pay off, and we are proud to be selected by L&G as a global real estate manager for its pioneering private markets fund.”
Jesal Mistry, head of DC Investments at Legal & General: “The L&G Private Markets Access Fund provides DC clients with a single point of access to a diversified portfolio of private market assets, seeking to capture the illiquidity premium in asset classes including private equity, real estate, private credit and infrastructure.
"We’re delighted to be collaborating with Invesco on the global real estate component of the strategy, which we believe has the potential to act as a valuable source of diversification and performance, all within a structure that can support the operational and liquidity needs of DC schemes.”
