The Canada Pension Plan, a government organisation based in Canada, has started to invest in Asia as well, showing that even developed governments can be interested in developing property markets.
While foreign property investors, REITs, and banks have been investing into Asian properties for quite some time, other institutional investors such as insurance companies and pension fund groups have invested virtually no money into any Asian markets. UBS's announcement that they would be creating a fund worth $1 billion dollars to go towards investment in Asia comes as little surprise to investors already present in the region. Major players who arrived several years earlier continue to hold the same optimistic view of the Asian real estate market as those who are just entering.
However Canada's second largest retirement program manager, the Canada Pension Plan Investment Board, announced plans to match UBS's fund of $1 billion and invest the same amount into their own real estate investment fund aimed at Asian properties over the next 12 to 18 months.
The company, which is based out of Toronto, launched its first foreign office in Hong Kong today while simultaneously announcing their investment into a private equity fund with $200 million. The private equity fund is managed by FountainVest Partners (Asia) Ltd. Another pension group, the private investment arm of the Ontario Teacher's Pension Plan also announced that they too would be investing their own $200 million into the fund.
Not known for their aggressive investing, very few pension funds have invested in Asia, and none have done so with this much capital. Mark Wiseman, senior vice president at Canada Pension said, "We've recognised that Asian markets will represent an increasing portion of the global capital markets. As a long-term global investor, we've recognised we need to have a greater amount of our investment capital in this region over time."
It is yet to be seen whether or not any major pension management firms based in the United States will also decide to begin to substantially invest into Asian markets.
