Matthias Thomas may be best known as the former chief executive officer of INREV, the European Association for Investors in Non-Listed Real Estate Vehicles – a position he leaves later this year. But his career spans decades in the real estate investment industry. Not only was he managing director and founder of IPD Investment Databank GmbH from 1998 but he has written over 70 articles on various aspects of real estate and frequently contributed to national and international journals throughout the world. In addition, he served as a professor at Germany’s EBS Universität für Wirtschaft und Recht (University of Economics and Law) between 2007 and 2010, when he joined INREV.

 

INREV is Europe’s leading platform for sharing knowledge on the non-listed real estate industry. It is a member-driven association whose goal is to improve transparency, professionalism and best practices across the sector, making the asset class more accessible and attractive to investors. During the seven years he has spent at INREV, Thomas has overseen a period of growth, with its membership now totalling 396. He also oversaw the publication of revised guidelines. This is an area in which the association has been active since the turn of the century, when it began developing guidelines that led to the launch in December 2008 of the first integrated set, since adopted by many non-listed real estate products.

 

INREV decided to revise its guidelines following a thorough review in consultation with industry players that sought to benchmark INREV’s principles against current practice. For instance, the reporting guidelines were reviewed in light of more than 40 reports produced by large fund managers. INREV also wished to make the guidelines practical and improve accessibility by making them available online. The use of an online version allows users to filter functionality and provides a more interactive and user-friendly version for the future. The industry also benefits from the online tool covering INREV’s guidelines that are specific for various fund styles and fund types.

The 18-month process completed in 2014 led to significant improvements to the vehicle’s overall structure. The original guidelines were organised according to the life-cycle of a fund, with separate requirements depending on stages, such as launch, operations and exit. The revised guidelines are organised into modules, including corporate governance, fund documentation, reporting, property valuation, INREV net asset values, fee metrics, liquidity and INREV data delivery. The best practices have been aligned to a large extent with AIFMD requirements.

 

In addition to the revised structure, INREV looked at compliance issues. Even though guidelines remain a framework that investors and fund managers are free to endorse and with a level of adoption they can agree among themselves, INREV has reshaped the compliance framework to ensure it is more understandable, the main changes being in terminology rather than the principles.

 

The corporate governance module is most affected by the change from the fund lifecycle approach to the modular approach in that it now contains a series of best practices for managers to adopt in consultation with investors. The original guidelines contained limited requirements on documentation. This module has now been significantly enhanced with a detailed list of disclosure requirements to be incorporated in the documentation when a fund is launched.

 

Finally, the review Thomas oversaw also included considerable enhancements to liquidity guidelines. The previous principles were limited and mainly covered secondary markets, but INREV now includes issues and redemptions of fund units, fund extension and fund wind-up. Despite the overall wording remaining similar, the onus in the new guidelines is now on the fund manager to take more ownership of the outcome of the valuation process.