The average current allocation to real estate in the Billion Dollar Club is 10.1% of total AUM, with a target allocation of 11.7%. In contrast, all other real estate investors have a current allocation of 7.6%, with a target of 9.6%.

“Investors with less than $1 billion allocated to real estate are therefore typically further from their target allocations” than their counterparts in the Billion Dollar Club, according to Preqin. “This means we are likely to see more entrants to the Billion Dollar Club as investors deploy more capital in the short to medium term to reach their target allocations.”

Core strategies are most preferred by Billion Dollar Club investors, with 56% looking to target them over the next 12 months. Significant percentages of club members will also seek value added (49%) and opportunistic (48%) funds.

Preqin says every geographic region is set to be targeted by a greater proportion of Billion Dollar Club members over the next 12 months compared to other investors. In particular, 62% of Billion Dollar Club investors will seek investments in Europe.

“The scale of Billion Dollar Club investors' involvement with the asset class affords them a lot of influence in the industry,” Moylan says. “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. This has an effect on the wider investor universe, as fund managers seek to align their interests more closely with investors.”

LONDON—Collectively, their numbers are small, while at the same time outsized. Preqin's Billion Dollar Club comprises just 433 members globally with $1 billion or more allocated to private real estate, representing 13% of the total number of institutional investors in the asset class. However, as of May of this year, they account for 84% of the institutional capital allocated to the industry, and collectively hold $39 trillion in assets under management.

“Institutional allocations to real estate are dominated by a small group of investors which allocate large amounts to the asset class,” says 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.” Numbering just 376 members three years ago, the club has grown by15% since 2014 to reach its present size.

The largest proportion of Billion Dollar Club investors are public pension funds, representing 29% of the total, followed by insurance companies (22%), asset managers (15%) and private sector pension funds (15%). The single largest institutional investor in private real estate is the Abu Dhabi Investment Authority, whose real estate allocation globally has been estimated at $50 billion.

F. Scott Fitzgerald famously observed that “the rich are different from you and me,” and this observation is applicable to members of the Billion Dollar Club. Not only do they have more AUM generally, but they also maintain noticeably different allocations to real estate compared with all other real estate investors, Preqin says.

The average current allocation to real estate in the Billion Dollar Club is 10.1% of total AUM, with a target allocation of 11.7%. In contrast, all other real estate investors have a current allocation of 7.6%, with a target of 9.6%.

“Investors with less than $1 billion allocated to real estate are therefore typically further from their target allocations” than their counterparts in the Billion Dollar Club, according to Preqin. “This means we are likely to see more entrants to the Billion Dollar Club as investors deploy more capital in the short to medium term to reach their target allocations.”

Core strategies are most preferred by Billion Dollar Club investors, with 56% looking to target them over the next 12 months. Significant percentages of club members will also seek value added (49%) and opportunistic (48%) funds.

Preqin says every geographic region is set to be targeted by a greater proportion of Billion Dollar Club members over the next 12 months compared to other investors. In particular, 62% of Billion Dollar Club investors will seek investments in Europe.

“The scale of Billion Dollar Club investors' involvement with the asset class affords them a lot of influence in the industry,” Moylan says. “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. This has an effect on the wider investor universe, as fund managers seek to align their interests more closely with investors.”