Global investors unite to tackle risk
Global real estate investors have launched a groundbreaking initiative which places the spotlight on effective investment risk management.
In an industry which saw US$1.2 trillion in real estate transactions during 2015 – a significant percentage of which reflects the pension’s savings of millions – the importance of effective investment risk management cannot be overstated.
The Global Investment Risk Management Forum (RMF) is the first of its kind, gathering CEOs, chief investment and risk officers from major institutional real estate investors, with the aim of developing the sector’s approach to risk management. In total, the RMF represents more than US$1 trillion in assets under management (AUM).
Convened by independent professional body RICS, the RMF meets regularly in London, New York and Singapore. In addition to sharing best practice and insights on trends shaping the real estate landscape, the RMF also engages leading risk management experts from other sectors, including insurance, equities and pensions markets.
“With the global financial crisis still fresh in the public psyche, the RMF demonstrates that the industry is taking its fiduciary duty seriously”, says RICS President & Managing Director at German fund manager Union Investment Real Estate, Martin Brühl. “We want to share knowledge on risk management, to develop our thinking as a sector and to lead by example when it comes to managing investment in a responsible and sustainable way.”
He added: “The RMF initiative is our response to today’s anomalies in the interest of greater financial stability: an artificially low interest rate environment engineered by central banks, competitive devaluation of currencies and a magnitude of asymmetric geopolitical risks, including the British EU Referendum, may lead to misallocation of funds and mispricing of risk.”
Philip Barrett, forum member and global chief investment risk officer at PGIM Real Estate, formerly known as Pramerica Real Estate Investors, commented: "A strong focus on investment risk management is an integral part of our investment process at PGIM Real Estate. We are pleased to support RICS in the launch of this global forum which will enable us to share investment risk management best practices with our peers".
The long-term aim of the initiative is to embed an industry-wide dialogue on risk management and to ensure investment leaders and their clients, including the public at large, benefit from the collective insight.
Organisations involved in the initiative include:
Aberdeen Asset Management
Alpha Investment Partners
AXA Investment Managers - Real Assets
Benson Elliot Capital Management
CBRE Global Investors
GLL Real Estate Partners GmbH
LaSalle Investment Management
M&G Real Estate
Morgan Stanley Capital
PGIM Real Estate, formerly Pramerica Real Estate Investors
Schroder Real Estate Investment Management
UBS Asset Management
Union Investment Real Estate
WT Fund Management Pte Ltd