Total assets managed by the top 100 alternative investment managers globally reached $3.5 trillion in 2014 (up from $3.3 trillion in 2013), according to research produced by global professional services company Towers Watson (NASDAQ: TW). The Global Alternatives Survey, which covers nine asset classes and seven investor types, shows that of the top 100 alternative investment managers, real estate managers have the largest share of assets (33% and over $1 trillion), followed by hedge funds (23% and $791 billion), private equity fund managers (22% and $767 billion), private equity funds of funds (PEFoFs) (10% and $342 billion), funds of hedge funds (FoHFs) (5% and $214 billion), infrastructure (4%) and illiquid credit (3%). The research also lists the top-ranked managers by assets under management (AuM) in each area. Data from the broader survey (all 623 entries) show that total global alternative AuM is now $6.3 trillion ($5.7 trillion in 2013) and is split between the asset classes in broadly similar proportions to the top 100 alternative investment managers, with the exception of real estate, which falls to 23%, and hedge funds, which increases to 27% of the total.

Despite increasing fears of a Grexit and the upswings in the Chinese stock markets, the global financial institution kept its medium- term growth prospects for next year. Drivers for a gradual acceleration of developed economies remain intact.

“Developments in Greece have, so far, not resulted in any significant contagion,” the IMF said. “Timely policy action should help manage such risks if they were to materialize.”

Investors are currently focusing to an increasing extent on the issue of interest rate developments as a lead indicator for initial yields on office property. This is because according to conventional principle, they should lead to falling prices and valuations. This gives special significance to interest rate analysis. 

Spanish REIT/SOCIMI Merlin Properties has secured investment bank backing for another capital increase to finance its takeover of the Testa real estate unit from builder Sacyr, this time for €1bn later this month, local media say.

M&G Real Estate, the real estate arm of UK investment fund manager M&G Investments, has acquired an office property in the central business district of Madrid in a deal worth up to €175 million.

The 377,000-square-foot property is located on Calle Ríos Rosas, an established office location in central Madrid. M&G will substantially refurbish the property before its anchor tenant WPP, the global marketing group, moves in on a long-term lease.
 

Inmaculada Ranera, Managing Director of Spain & Portugal at specialist property adviser Christie + Co says that the record tourism rates in the first five months of the year provide Spanish hoteliers with a renewed sense of optimism on the back of a volatile economic environment. 

Firms managing closed-end private real estate funds have a record USD254 billion in dry powder available, up 37 per cent from the USD185 billion in December 2014, and representing the highest amount on record.

Global alternative assets will increase to $15.3 trillion by 2020. In the lead up to the boom, the global alternative asset management industry is expected to experience a period of transformation as players calibrate their business and operations and make technology a top investment priority, the report says.

With signs of economic improvement and attractive returns, investors are flocking to European real estate. Southern Europe has seen a dramatic uptick in commercial real estate investments so far this year, particularly in Italy and Portugal, according to Real Capital Analytics.

“Southern European investment is definitely on the rise this year as the economy continues to grow stronger,” Tom Leahy, director of EMEA analytics at Real Capital Analytics, said in a statement. “We are back to pre-crisis 2007 levels in transaction volume terms.”

We all need to eat, and we all need to stay clothed. To the uninitiated, retail real estate seems like an easy defensive play, relatively resistant in any downturn. It is anything but, however, and the Great Recession has laid bare the shortcomings of any managers who thought that they could simply buy and hold.

Opportunity is always present in retail, but with it comes risk. For investors, “retail has the widest breadth of investor opportunities,” says Peter Hayes, managing director and global head of research at Pramerica Real Estate Investors, the property arm of US-based Prudential Financial. An evolutionary asset class, “it is constantly looking to reinvent itself. It is very aggressive.”

Quantitative easing by the European Central Bank is likely to have global capital market implications, including real estate. We are now contemplating a period in which real estate yields/cap rates may well trend even lower in many markets in the short term.

Important changes to the macroeconomic and financial outlook have emerged over the past six months:

·      The ECB’s quantitative easing programme (QE) has changed the landscape of monetary policy worldwide as other countries try to adapt to the weakening euro and the global influence of very low (in some cases, negative) interest rates in Europe.

·      An accelerating US private-sector economy has delivered more than 250,000 net new jobs per month over much of the past year and brought the US unemployment rate down to 5.5 percent. This allows the US Federal Reserve Bank (Fed) at least to contemplate the first steps toward normalisation of policy interest rates at some stage in 2015.

·      China’s weakening economy has provoked a government response, boosting investment and easing monetary policy. Doubts over the Chinese economic outlook remain a headwind for many countries in Asia Pacific.

Blackstone Group LP is seeking to restructure some of the 6.4 billion euros ($7.2 billion) of Spanish home loans it bought at a discount to help borrowers meet repayments, according to three people with knowledge of the matter.

As mainstream banks continue to face growing pressure from the alternative finance industry, a new study by Amicus Finance, a provider of short term lending solutions, has revealed the key factors driving small businesses towards alternative lenders.

The alternative investment industry, which includes hedge funds, private equity and real assets, is expected to grow fivefold to at least $13.6 trillion in the next half decade, professional services firm PwC said in a report released on Sunday.

 Banco Bilbao Vizcaya Argentaria SA is sounding out investor appetite for two big portfolios of nonperforming debt and real-estate assets, according to people briefed on the potential deals, as Spain’s economic recovery helps banks shed more of their bad loans.

Real estate consulting firm JLL has estimated that the cost to rent office space in Madrid and Barcelona will increase 35% and 30% respectively over the next four years.

According to the company’s calculations, these will be the biggest rises seen in office space rental prices over the whole of the EMEA region (Europe, Middle East and Africa).

These two cities will also head the list for greatest rise in rental prices of industrial units in the same region, and will only be exceeded by Dublin.

It's a situation mirrored throughout the world's luxury real estate markets. Revenue inflows from foreign investors and buyers of Spanish real estate are at an all-time high, currently representing around 12.2% of residential property transactions in Q1 2015.

Large-scale real estate investors like London-based Europa Capital are building high-class residential units and selling them on completion to almost entirely foreign buyers. The firm's latest project is being managed by local developers Bonavista Developments and is located in Barcelona, the focus of considerable interest from foreign buyers.

Over the last few months, GreenOak has achieved the following:

•   Acquired five logistics assets in Greater Madrid totaling over 100,000 sm
•   Secured exclusivity on a further 3 assets comprising an additional 100,000 sm in Greater Madrid that GreenOak expects to acquire in the near term
•   Established a dedicated team to focus on logistics in Spain which has been in place for several months
•  Developed a deep and active pipeline of new investments in the sector in Barcelona, Zaragoza and Valencia in addition to Greater Madrid

GreenOak intends to grow its platform to include up to 500,000 square meters over the next 12 months.

The sector, one of the country's worst-performing areas since the real estate crisis of 2008 dragged the Spanish economy into the doldrums, has received a new lease of life recently, thanks to wealthy foreign investors.

Foreign money is driving a recovery in Spain’s property market, a sector that has been the country’s Achilles heel since the real estate bubble burst in 2008 and brought the economy crashing down with it. 

According to Spain’s property registrars society, foreign nationals bought 12.2 per cent of residential properties in the first quarter of 2015, up from 9 per cent in 2006.