By Cristiano Stampa, head of Fund Management and International Investments di Generali Real Estate discusses the company’s investment focus.
Do you invest in property, or have selected exposure to real estate via funds?
The Generali Group invests regularly in the real estate asset class, primarily via direct property investments, but to a lesser extent considers opportunities in third party managed funds. Indicatively, funds represent less than 6% on the overall real estate portfolio as at year-end 2014.
What type of property investing are you looking at currently: direct/indirect, commercial/residential, active/passive?
Currently our investment focus is on commercial assets (office, urban retail, mixed use buildings). Generali Real Estate has a strong management footprint in continental Europe where direct investments are our favourite route; GRE is currently expanding its reach in UK, US and Asia, where partnerships and indirect investment modalities are considered.
Do regulatory issues push you more towards closed-ended or open-ended solutions for accessing property?
We believe that the open-ended and the closed-ended funds have essentially a very different strategic investment angle, more than a mere regulatory one. The last global financial crisis tested limits of both solutions; so it highly depends on the investor time horizon and liquidity flexibility it may have.
Would you invest/allocate/select via real estate funds of funds?
No, because GRE is able to select and manage internally a portfolio of indirect investments, if at any point considered of interest.
Would you categorise hospitals or vineyards as ‘property investments’ or do you consider these to be ‘infrastructure’ or other?
Clearly there are point of contact between the two asset classes, but our assessment is always based on the asset capacity to be fungible in use and have a material residual value (real estate), rather than serving a single purpose with possibly no or too restrictive alternative use / conversion options. Therefore, we tend not to consider as property investment assets those whose value is too dependent on the business run with them.
Can you name any ETFs or index funds in particular that you may consider for accessing exposure to property?
At this stage, it is not in our strategy to access property exposure with these instruments; in fact, we are equipped to be active managers and seek to generate alpha to our investors.