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While this investor group accounts for only 13% of the total number of institutional investors in the asset class, their share of the institutional capital allocated to the industry now amounts to 84%, or $39 trn (€35 trn) in assets under management, according to Preqin's latest research.

'Institutional allocations to real estate are dominated by a small group of investors which allocate large amounts to the asset class,' commented Andrew Moylan, head of real estate products at Preqin. 'Typically comprising the largest investors in terms of overall AUM, the "Billion Dollar Club" has seen its ranks swell in recent years, as investors seek the income opportunities, strong returns and low correlation to other asset classes of real estate investments.'

According to the data, the single largest institutional investor in private real estate is the Abu Dhabi Investment Authority (ADIA, pictured), which is estimated to allocate $50 bn to the industry. In second place is APG, the Netherlands' All Pensions Group, also the largest European player with an estimated allocation of €41 bn.

Europe and core key targets
While every geographic region is set to be targeted by a greater proportion of 'Billion Dollar Club' investors in the next 12 months compared to other investors, Europe is a particular focus, with 62% of the investor group citing the region as a target, Preqin says.

Core strategies are most preferred over the next 12 months, according to 56% of respondents, with significant proportions also planning value added (49%) and opportunistic (48%) funds.

'These largest investors are best able to call for greater availability of alternative methods for accessing the asset class, as well as pushing for lower fees, more transparency, and more amenable fund terms,' added Moylan. 'This has an effect on the wider investor universe, as fund managers seek to align their interests more closely with investors,' he concluded.