WINNER
“Innovation, strong two-way relationships, market research and analysis capabilities,” judge’s comment
Country |
United States |
Formed in 2014, StepStone Real Estate (SRE) is the real estate investment and advisory business group of StepStone Group, a global private markets firm. One of the largest real estate investors worldwide, it serves around 70 global institutional clients, managing over $175bn (€161bn) of their real estate capital allocations, and advised on $171bn of assets at the end of 2023.
SRE provides discretionary and non-discretionary private real estate investment services, the hybrid model offering clients significant advantages. It has a proven record of assisting clients with strategic planning, market trend identification, investment screening, managing portfolio risk, manager selection and fee negotiation.
The consultancy is headed by nine partners with an average 26 years’ experience as real estate private equity and finance professionals. In 2023, it held around 1,000 meetings with managers raising capital in the real estate private equity market. SRE advisory professionals are allocated to geographically focused sectors; these include core/core+, large to small cap value-add/opportunistic, and real estate debt. This structure provides senior client managers and clients access to specialised expertise and sector updates. Furthermore, SRE’s proprietary technology, SPI Research, gives clients real-time access to information on over 8,400 funds and 3,600 general partners focused on real estate.
A recent advisory mandate concerned a large US public pension plan with US$4.3bn in core real estate assets, mostly in separately managed accounts (SMAs). The SMA portfolio had materially underperformed, so SRE backed a massive overhaul, advising on strategy and implementation. The plan consists of a controlled, strategic disposal of the SMA assets over a three-year period, with proceeds to be recommitted to a select number of core and core+ open-ended funds approved by SRE. The careful selection is intended to improve performance, remove tracking error, improve diversification, provide potential liquidity, and further improve alpha by reducing overall fees. SRE also created a portfolio model allowing the client to collaborate, test, and form opinions on both the SMA manager- and broker-recommended disposal plans.
STRATEGIC TAKEAWAYS
➤ Management of over $175bn (€161bn) of real estate capital allocations |
➤ Strong connections with managers raising capital |
➤ Proprietary technology giving clients real-time access to fund and general partner data |
HIGHLY COMMENDED
The investment consulting business of Wüest Partner (WP) was created in the group’s Düsseldorf office in 2020. The team currently consists of six real estate, finance and sustainability specialists, advising institutional investors with aggregate net assets of €7.5bn. Services offered include analysis of existing portfolios, development of investment strategies, and manager selection. WP’s approach includes study of public and fee-based market data; building highly granular portfolios to exploit different sources of return and value creation; and consideration of strategy-specific fee structures. WP recently developed an ESG strategy for a €4bn real estate portfolio. From a status quo analysis of CO2 and stranded assets, a plan was developed, integrating the CO2-induced opex and capex within profitability calculations. As a result, the client reduced the expected energy and CO2 opex by 31%, while increasing expected cash flow yield.
Judged by
Michael Bujatti
Sergio Carfizzi
Stein Monsen
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