We believe that the best strategy for investing in real estate, particularly in Asia where real estate market cycles are historically short, is to have the flexibility to move in and out geographical markets over the course of market-cycles. This approach enables us to examine the region on a comparative relative-value basis, and to pursue the most attractive risk-adjusted investment opportunities at any given point in time.
We take an integrated and holistic approach to investment opportunities across the region that leverages our pan-Asian platform and focuses on market segments and opportunity. Through detailed analysis of historical values, replacement cost and the balance between demand and supply, we seek to identify where a particular sector in a specific country is in the context of the broader real estate cycle. Our professionals have done this successfully in the past, and by following this strategy, we are able to reduce country, sector and market-related risks by constructing a diversified portfolio of high-quality assets across the region.
Our real estate professionals have one of the longest and best-performing real estate investment track records in Asia with proven ability to consistently deliver returns to investors.
loss of capital to investors
A strong focus on portfolio construction is another way we control risk. The investment strategy is based on the premise that different markets in Asia offer different relative value at any given point in time. We believe that our fund benefits significantly from originating a broad range of investment types across a range of geographies, and then selecting the investment opportunities with the most attractive risk-adjusted expected returns. For example, by pursuing a multi-market strategy, we have flexibility to move in and out of markets or sectors over time, giving a competitive advantage relative to single country or single sector focused funds. This is particularly important in Asia where real estate market cycles are shorter and after more pronounced than in the more developed real estate markets of Europe or North America.
Our investment strategy originates from a deeply rooted principle of capital preservation. Although each investment is required to meet underwriting criteria for minimum return expectations, first and foremost, when selecting any investment, our focus is the probability of returning at least the invested capital. We believe that real estate investments in particular offer a very attractive risk-return profile, and that experienced investors are able to benefit from the fundamental growth in Asia, while at the same time achieving capital preservation by ensuring that investments are secured against real estate hard assets.
Our strategy is to employ a disciplined credit-driven focus on analyzing real estate asset values and counter-party risk. Two key risks of investing in Asia are (i) when to invest and exit a particular sector within a specific country and (ii) counterparty risks related to whom one is buying from or partnering with and to whom assets are being sold. A key element of our investment strategy is therefore a credit-driven focus combined with a research intensive approach to mitigate these particular risks.
Our credit-driven approach is derived from a long history of investing capital for insurance businesses with long-run liability matching objectives. In the aggregate, our real estate professionals have spent 33 years investing capital for the alternative investment divisions of leading global insurance companies, and, consequently, have acquired a common approach to real estate investment founded on credit-driven analysis and a “brick and mortar” investment approach. We believe that the strength of our ability to assess fundamental real estate asset value or replacement cost is a key differentiating feature that should enable us to deliver superior risk-adjusted returns.