ULI UK Fund Manager Workshop

ULI UK’s fifth fund manager workshop saw an audience of 70 members and their guests hear the perspectives of four leading fund managers from the UK and Europe plus two leading advisers in European Fund formation and global fund raising. The discussion focused on the questions of what has changed in this environment in recent months, how is the business evolving and the opportunity areas going forward.

In a period of continued change with rising positive sentiment and huge demand for property and yield, all panellists, representing both the property debt and equity markets, agreed that real estate,  yet again, is a hot asset class.

So what were the key messages to come out of the workshop?

In general…

  • There is an increasing appetite for property investment opportunities in Europe, particularly from North American investors including significant activity from the US institutions. Investors are no longer risk adverse and are looking for equity and value-add opportunities to drive return.
  • Investor return requirements are shifting from a high of 20% to a more realistic 15% for opportunistic propositions, 12-16% for value-add and up to 10% for core (although clients still want managers to target 20%)
  • Uncertainty around regulatory change (e.g. ‘Slotting’, Basel III, Solvency II, AIFMD) in Europe is however influencing the positive sentiment and this is impacting lenders, advisors and investors.


  • Liquidity in the debt market has significantly improved, with increasing demand for product and a more sophisticated investor understanding of the debt space.
  • Senior lenders are back in the market and are willing to move up the risk curve.
  • 60% bank leverage is commonplace.
  • There’s little appetite for leverage in debt funds in Europe but the US investors are becoming more accepting of up to 25% leverage.
  • The change in sentiment might ignite the securitisation market. The CMBS market is slowly re-emerging in Europe and is very active in the US.


  • Equity investors are coming back to the market from a myriad of global sources.
  • There’s increased interest in funds, with managers seeing oversubscriptions last year for the first time since circa 2006.
  • Some investors still prefer the smaller ‘club’ approach so that they are in a position to influence strategies directly, but combined funds are becoming attractive again in the battle to secure assets.
  • There is still demand for co investment opportunities.

Fund managers….

  • A lack of new players, hedge funds and the like, are entering the market as investors seek the reassurance of working with fund managers with solid track records and a good pipeline of product.
  • Industry may be suffering from regulation fatigue, but leading up to July this year is a critical period for fund Managers. Industry still has some way to go before we emerge from the regulatory uncertainty cause by AIFMD and its fragmented implementation across Europe.
  • Investors continue to develop in-house expertise, but realise the need to rely on advisors and fund managers to give them access to and ability to react quickly to, the widest set of opportunities.
  • Clients are becoming more demanding and require customisation and managers need to be in as potion to respond.
  • There is still a pressure on fees, but clients are becoming more realistic and appreciate the costs associated with meeting new regulatory requirements.